Forty Years of The Firm: Trump and the Coasian Grotesque

In his classic article “The Nature of the Firm“—which I wish would be put on the list of required reading for political theorists; it really should be in our canon—the economist R.H. Coase divides the economic world into two modes of action: deal-making, which happens between firms, and giving orders, which happens within firms. Coase doesn’t say this, but it’s a plausible extrapolation that making deals and giving orders are, basically, the two things businessmen know how to do.

In the last year, it’s occurred to me, on more than one occasion, that Trump is a Coasian grotesque. Making deals and giving orders: that’s all he knows how to do. Except that he doesn’t. As we’re seeing, he’s really bad at both.

Regardless of whether he’s good or bad at the ways and means of the firm, what Trump definitely doesn’t know is politics. Authority, legitimacy, persuasion, leadership: these are arts that Trump is completely unpracticed at, and it shows. When it comes to wielding power in the political sphere—I’m not talking about executive orders, of which Trump has issued many, and which are a sign of his weakness, not his strength; I’m talking about exercising power that requires the assent and cooperation of other political actors—he’s completely out of his league.

There’s a reason for that: the conception of he power has—such as it is and however bad he is at it—is drawn from the Coasian world of the firm. To that extent, we can read Trump’s failure not simply as a referendum on Trump, not simply as a referendum on the Republican Party, but more largely and more importantly, as a verdict on 40 years of politics in the United States. For what neoliberalism has meant, among other things, is not simply the rise of markets and money and all the rest; it has also meant, as Wendy Brown has argued so compellingly, the rise of economic modes of reason and their insertion into politics. Not just their insertion, but their domination. Such that our entire conception of political leadership is drawn from the world of the firm (that’s not Brown’s argument; it’s my tangent to her argument).

This is not a story of the rise of Reagan or the Republican Party. It’s a completely bipartisan story. It was Jimmy Carter, in 1975, who helped begin the story, when he launched his presidential campaign with the claim: “I ran the Georgia government as well as almost any corporate structure in this country is run.” Four decades later, managing a firm no longer provides a standard of leadership. It is the substance of leadership.

A substance, as we are now seeing, that is increasingly irrelevant to the challenges of our age. Trump’s problem is not that he’s bad at making deals or giving commands. Even if he were good at that, it’d not be sufficient to manage the crises of his coalition. A different sort of art is called for, one that is not drawn from the firm.

If we had a real political opposition, if we had a real left, they’d be using Trump not as an example of right-wing lunacy or Republican perfidy; he’d be Exhibit A of Forty Years of the Firm.


  1. Donald Pruden, Jr., a/k/a The Enemy Combatant October 23, 2017 at 9:46 am | #

    A term I used (dare I go Trumpian and claim that I coined it?) in the comments section of this great blog bear reiterating: “Reactionary” Politics is “Boss” Politics.

  2. mark October 23, 2017 at 10:06 am | #

    Perhaps it is more surprising that America did not vote in a Trump decades ago.

    And that Britain still hasn’t.

    • Chris Morlock October 23, 2017 at 11:36 am | #

      Thatcher? Pretty close.

  3. marku52 October 23, 2017 at 10:45 am | #

    Yes, the Trump experience has been just as bad as I expected, but much, much more incompetent

    Mark, I read Brexit as a fairly exact analog to Trump.

  4. jonnybutter October 23, 2017 at 11:02 am | #

    …our entire conception of political leadership [has become] drawn from the world of the firm


    ‘Running everything like a business’ is one of those ideas that win by blitzkreig – shock and awe. It can win that way because it means different things to different people. To (esp white) liberals and john and jane Q it vaguely meant that you run the gov efficiently (except the military, natch). Al Gore. It’s classic pre-1980 Republicanism, btw.

    But not everyone had that more limited view, and the broader view just kind of slipped in there over time – a slight-of-hand thing for some big plurality of people, which happens in politics all the time, I would think. And it definitely is the totalizing thing Corey is saying.

    The ‘great idea of the age’ is to try to assign an actual dollar price to everything; if we’re including intangibles like IP, then we also include feelings – everything. Every moment of pleasure you have is part of an economy. Likewise every little ‘sincere’ catch in your throat when you assert something, can also have something approaching (as academics like to say) an actual dollar value. That’s the ethos.

    Perfect vulgarity. An idiotic, but nonetheless gigantic, insult to the human spirit.

  5. Chris Morlock October 23, 2017 at 11:35 am | #

    Failure of the Left to realize why Trump was elected will be devastating in the future. All kinds of eloquent reasoning and false historical anecdotes just make the problem worse. The direct problem is that the working class has abandoned the Democratic party, and the indirect problem is that the American public has rejected 1960’s Left social theory. Reactionary thought has little to do with any of it.

    Trump is essentially exactly the same as Reagan, except Reagan was less famous when he won. If he can’t “heard the cats” on the Right he will be a much less successful Reagan. I think the only thing I can agree with Corey on the political legacy of Trump is that he is in fact the quasi-nationalist version of Jimmy Carter, and will have the same life span.

    • nastywoman October 23, 2017 at 12:52 pm | #

      ”Trump is essentially exactly the same as Reagan,”
      ”he is in fact the quasi-nationalist version of Jimmy Carter, and will have the same life span.”

      And that might be the problem? – as ”the people” nowadays seem to judge so called ”politicians” much more about their ability NOT to be ”a politician” – and they elect -(and remember) ”politicians” much more fondly – if these ”politicians” didn’t act like ”politicians” Trump NEVER can be like ”Reagan” – as Reagan in the mind of so many Americans was really ”a Great Dude” and Carter – I mean – listening to all the praise he got again as a member of the five ”good” Presidents – How could you even thin that an a…hole like Trump ever could have the same ”life span”?

      • Chris Morlock October 23, 2017 at 11:12 pm | #

        It really doesn’t matter ultimately, as the “outrage” over Trump is what fuels him and his followers, and brings along a good chunk of the desperate working class. The more slights, nagging, and outrage over anything Trump does or says simply makes him more popular. Dems are in for another rude awakening in 2018 and 2020 is my guess.

        But, if he were legitimately allowed to fail on his own, which he has demonstrated the ability to do in spades, maybe we could make some progress. Instead, a kind of neo-lib and neo-con cabala mixed with corporate MSM apathy and need to make money off of fake controversy has already doomed the Left to wander the desert for 40 years, as the prophetic Bannon has claimed. The fact that men like Trump and Bannon can mold the trajectory of America should tell everyone the Left as a political concept and as a political actor are in fact DOA.

        • nastywoman October 24, 2017 at 12:13 pm | #

          ”The more slights, nagging, and outrage over anything Trump does or says simply makes him more popular.”

          Perhaps – but as an argument about being NOT outraged about the f… Moron – it doesn’t work very well – as it is in the nature of (good) people to be outraged about a…holes. And I understand the reaction of his ”followers” very well but on the long run – being (dutiful) reminding them every single day what an idiot he is – will work – I promise – It’s the way a lot of a…holes have been already brought down in this world – and this one is really up for a rude awakening.

  6. nastywoman October 23, 2017 at 11:42 am | #

    Watching 5 Ex-Presidents and how obviously close together ”Somebody” brought them – and how more and more ”watchers” realize what all of this is really about makes me me so happy that it isn’t about ”politics” or ”firms” anymore – at all!

  7. Jim October 23, 2017 at 2:25 pm | #

    There’s not much question that neo-liberalism incorporates the Coasian framework and pretty explicitly so. But, while this may account for a large part of the center (left and right) policy discourse, it doesn’t very adequately address the hard right’s evangelical/fundamentalist Christian or openly racist, misogynist and xenophobic poisons that have increasingly dominated American and some foreign social policy discourse and, with it, increasingly negative economic consequences. Those certainly are not in short or long-term interests of the firm. It’s not like the neo-liberalists need the hard right to deflect a true left political alternative since that doesn’t now exist and hasn’t for a long time. To the extent that “Trumpism” embodies the hard right reactionary tendencies, it would seem to pose a threat to neo-liberalism, which I would argue is Bannon’s main argument.

  8. Lichanos October 23, 2017 at 9:06 pm | #

    I don’t see why people assume that large firms are run well. My experience tells me that they are incredibly wasteful.

    • marku52 October 24, 2017 at 11:13 am | #

      Yes, that is a very popular myth with people who have never worked for one…..

  9. jonnybutter October 24, 2017 at 10:04 am | #

    I know I’m not the only one who thought many times during 2016 general election campaign that Trump was *trying* to lose. Now it’s like he’s trying to get busted – and wouldn’t/won’t succeed, probably! It’s a rather pure form of corruption – just an obvious, simple transaction.

    Trump is a startling distillation, but what he exemplifies he didn’t create or promulgate.

  10. Aardvark Cheeselog October 24, 2017 at 12:59 pm | #

    I’m no historian (so I’m off the hook for cites) but I’m pretty sure that the notion “this country needs to be run like a business” has a much longer pedigree than 40 years.

    • jonnybutter October 24, 2017 at 1:44 pm | #

      I’m sure you are right, Aardvark Cheeselog. But this last epoch (40 years?) has been characterized by, among other things, a remorselessly emergent literalism. What was once more of a simile – running the country *like* a business, which, as I said before, is an old time GOP stalwart – has become more literally true. It’s a mental illness, literalism! My theory is that it goes along with fundamentalism and other humorless, antisocial pathologies..

  11. Glenn October 24, 2017 at 3:21 pm | #

    Government + mentality, governmentality.

    A “full-fledged form as a force aspiring to the complete colonization of social life. It was at this moment too that political economy established itself as the dominant science and the science of domination.” — Guy Debord, Society of the Spectacle

  12. Rob Chametzky October 25, 2017 at 10:44 am | #

    This terrific, brief essay puts into the appropriate, but unappreciated, analytic framework some thoughts I (and others) have had about Trump. My version appeared in “FIrst of the Month” on 3 November 2016:

    Don Trump is, preeminently, a Boss (and much less human than e.g., Don Corleone, it seems): he’s never, so far as one can tell, been anything else. W [Bush] was head of two failed oil businesses, then a board member of a third and managing general partner (2% owner) of Texas Rangers, and Mitt was head of Bain Capital, so all have certainly been Bosses. But the other two have politics, too, while The Donald is Pure Boss, and it shows. That’s what really distinguishes him, in his manner, his treatment of others, his evaluations of himself. None of this should be surprising, coming from a Pure Boss, but maybe it could give some just a bit of pause in thinking that “business” is a good model or preparation for anything else.

    Moment in the 1st debate, when Don Trump said… “It’s because it’s about time that this country had somebody running it that has an idea about money.”…was exactly to the point: “. . . it’s about time that this country had somebody running it. . . .”

    The POV from the Boss.

    –Rob Chametzky

    • Jim October 28, 2017 at 8:10 pm | #

      It is true that Trump has never been anything but a “boss” but it is also true that he ran his various businesses really badly and eventually turned into a “brand” that others who actually ran businesses used. He’s pretty much always been a fraud and not much more.

  13. Jonas October 26, 2017 at 8:22 am | #

    Unfortunately this is global. A ‘corpocracy’ masquerades as democratic politics [the several thousand well-paid lobbyists in Washington & Westminster, & who knows how many elsewhere, wield far more power than voters]. While nations act like competing corporate conglomerates a sustainable future for humanity remains a dream.

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