Donald Trump and Bernie Sanders cemented their positions as legitimate contenders for their respective parties’ Presidential bid with convincing wins in New Hampshire. Sanders, the self-proclaimed socialist senator from Vermont, was practically a favorite son of the neighboring New England state and the Clinton had long been “managing expectations” of a defeat there. Donald Trump easily overcame his Iowa set-back, which his Republican opponents had pointed at to prove that the flamboyant populist “lacked ground game” and was “a loser”. Yet Mr. Trump knows that “winner” is defined as the person who places first at the end of a race, not after the first lap; and his ground game seemed good enough to inflict a crushing defeat on his rivals.

The Republican field continues to clear as more Presidential wannabes become primary also-rans. The electoral prospects of all but Ted Cruz and Marco Rubio are now a statistical improbability; you are more likely to be hit by a meteor in your backyard than to see Carly Fiorina or Chris Christie as President of the United States. Even Jeb Bush clings on only because he has the largest war chest of them all; but he has no momentum and money alone may keep you in the game, but not ensure a happy outcome. Some conservative analysts have gone so far as to say that Trump need only win another state to become virtually unstoppable. That two Hispanic Senators should represent the best hopes of the GOP establishment against a conservative insurgent is a testimony to just how much the nation has changed, and for the better. Although I find their politics odious, the fact that no one is batting an eye at their candidacy is as promising a development as the election of an Irish Catholic to the White House in the 1960 election.

The Democratic field was never as complicated as the Republican three ring circus, but it has become more rather than less so. Bernie Sanders was never supposed to have a chance at contention; he was a fringe candidate from the Democratic far left just has Jim Webb was a fringe candidate from the Democratic far right. Neither was supposed to do more than appear at a couple of debates, prove the breadth and inclusiveness of the party, and then fade quietly into that good night as Hillary was bequeathed the crown. Yet the pugnacious northeasterner didn’t get the script, and so he raged, raged against the dying of his electoral campaign. And it is working.  Hillary Rodham Clinton is undoubtedly waking every night in a cold sweat, with visions of 2008 echoing in her nightmares. And so she should; she is on the verge of losing another primary bid for exactly the same reasons.

Bernie Sanders and Donald Trump: you might think that they are as different politically as two men could be. The former is a long-time politician and avowed socialist; the latter is a billionaire real estate mogul who wears his lack of political experience as a badge. Yet they have a lot in common: they have conviction, moral indignation, a lack of political correctness, disdain for the establishment and status quo. They are both supporters of a strong middle class and they have both tapped into the public anger at the “do nothing” complacency of the Washington elites who…well…do nothing as the country visibly goes to the dogs. They are revolutionaries from opposite sides of the political spectrum, but that is what Americans are realizing they need: a revolution to sweep away the entrenched interests, bureaucracies, big government and big business. Left and Right might disagree on every almost every particular, but they both agree that radical change is needed if the condition of Main Street are ever to improve.

Incrementalists and defenders of the status quo, beware.

A Long Tradition

The emergence of Donald Trump and Bernie Sanders, heralded already by the shock election of Barack Obama in 2008, is well within the long tradition of US politics. The American Republic, birthed in a popular revolt and dedicated to the proposition of empowering the sovereign people, keeps alive the spirit of revolutionary, rather than evolutionary, change. Our political history has been characterized by long periods of political stalemate and entrenchment by powerful interests, only for these to be swept aside suddenly by short, but intense, periods of change. Our constitutional history reflects this pattern; the 27 amendments to our founding charter have not come in a steady drip of one every 10 years, but rather in dense clumps:

1. The Federalist Era wave (1787-1794): the self-evident failure of the Articles of Confederation led our Founders to draft a new Constitution with a stronger federal government. This charter was only ratified with the promise that strong guarantees of individual and state rights would be included, leading to the first eleven amendments;
2. The Reconstruction Era wave (1865-1870): The 13^th, 14^th and 15^th Amendments rode the wave of Republican majorities in Congress following the Civil War to prohibit slavery and protect the rights of the former slaves;
3. The Progressive Era wave (1913-1919): The 16^th, 17^th, 18^th and 19^th Amendments were all efforts by the “Progressive Society” to fight the perceived evils of the time: income inequality, machine politics, “demon rum” and gender inequality;
4. The Civil Rights Era wave (1961-1967): the 23^rd, 24^th and 26^th Amendments were additional efforts to extend the suffrage to those who were still being discriminated against, especially black Americans and young men going to Vietnam who were “old enough to fight, old enough to vote”.

What exactly triggers these political revolutions? Why is there a gap of approximately 50 years between them? Why do they burn themselves out after 5 years? The fact that something is not well-defined does not mean that it does not exist and this pattern of revolution-stagnation-revolution has been going on long enough for it to be well-established. Perhaps it is related to the “long-wave” economic pattern known as Kondratiev cycles[1]; economic conditions certainly play a major role in these changes. I would nonetheless propose to call them Olson Cycles, in honor of the brilliant American economist and social scientist Mancur Olson, who so impressively described the mechanism of economic stagnation through the growth and action of entrenched interests[2].

Olson was fascinated by the phenomenon of the “Japanese miracle” and the German “Wunderwirtschaft”, the economic booms that followed after the calamitous Second World War. In contrast, the United States and Great Britain, though victorious, grew much more slowly than the vanquished. Olson speculated that the war had not only destroyed much property and infrastructure, which needed to be replaced; it had also destroyed many or most of the entrenched political and economic interests through death and regime change. This lead to periods of extraordinary and unfettered dynamism. Olson then when on to describe how interest groups operate:

• Interest groups initially come together to promote their mutual self-interest through their own actions, but also through influencing government;
• Public officials often respond favorably, since this can mean economic growth in their region or other perks for themselves. A law is passed here, a regulation is modified there, all with the purpose of creating a more favorable environment for the special interest;
• These changes tend to discourage rivals and new competitors, by making competition more difficult for them, or else they enhance the profitability of the special interest at the expense of the public welfare – in effect, acting as a subsidy;
• The more profitable and powerful the special interest grows, the greater the influence it has on government, in a positive feedback loop that perpetuates the cycle;
• Over the course of years and decades, these small legal and regulatory changes amount to an incomprehensible mass of legislation and bureaucracy that in and of itself becomes a challenge to regulate and implement; while the rent-seeking behavior of the special interests becomes a drag sufficient to stagnate an economy even as large as ours.
• It was Adam Smith himself who wrote: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices.”

This model seems to coincide perfectly with our observations of American history. In every period, peace, prosperity and good governance led to a booming economy, which in turn led to combinations of special interests each seeking to carve out a larger slice of the pie, leading to stagnation and growing inequality. When this behavior became too extreme for the American people to tolerate any longer, revolutionary change occurred through the action of popular indignation.

Donald Trump and Bernie Sanders – and Barack Obama or Elizabeth Warren – fit into the pattern as well. We tend to think that our current conditions are new, unrelated to anything that has happened before; but while technologies have advanced enormously, human beings have changed very little. The lessons of the past are as valid today as they were when they occurred, and their study will bring us much profitable insight. Consider how appropriate the following quotes are and how applicable to our own times:

• John Adams: “Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good.”
• Andrew Jackson: “Mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges… which are employed altogether for their benefit.”
• Andrew Jackson: “It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes”
• Theodore Roosevelt: “The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.”
• Woodrow Wilson: “The government, which was designed for the people, has got into the hands of the bosses and their employers, the special interests. An invisible empire has been set up above the forms of democracy.”
• Woodrow Wilson: “A little group of willful men, representing no opinion but their own, have rendered the great government of the United States helpless and contemptible.”
• Franklin Delano Roosevelt: “But while they prate of economic laws, men and women are starving. We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.”
• Harry Truman: “I remember when I first came to Washington. For the first six months you wonder how the hell you ever got here. For the next six months you wonder how the hell the rest of them ever got here.”

Anecdotal, no doubt. But the more I read, the more convinced I am that the evils which afflict our society are those mankind has always struggled against. Greed, inequality, division by race or creed, venality in office, corruption, speculation, self-interest: whether in ancient Athens or modern New York, these are the litany of sins of humanity, rather than of any particular form of government or system of economic organization. It is surely too much to compare Donald Trump with Andrew Jackson or William Jennings Bryan with Bernie Sanders – but the echoes are there, like reflections of a distant mirror:

• Both Jackson and Trump were extremely wealthy men, both had unorthodox marriages, both had crazy hair, both were socially conservative, but economically liberal, both were accused of being radical populists and dictatorial threats to the Republic, the Caesar of their time;
• Both Bryan and Sanders were progressives (even socialists), both stood up for the “little guy”, both railed against big banks and big business, the moneyed interest, and corruption in government. Bryant said no man should be crucified on a “cross of gold” while Sanders might well say that no person should be crucified on a “cross of debt”.

We are overdue for the next American revolution. It is past time to enact some new amendments to keep the dear old Constitution fully functional. We are fortunate that we live in this great Republic, dedicated to the proposition that government should be “of the people, by the people, for the people”. In your monarchies, dictatorships or illiberal democracies, such radical change is almost impossible to come by due to the simple proposition that the status quo must always be right: no dictator has ever extended his or her empire by admitting they were wrong[3]. The resilience of our government is such that it can withstand a great degree of elite control without becoming an oligarchy, and it can bend but not break when the winds of change blow hardest. So long as we have faith in the good sense of the American people, the people will throw up champions for reform, revolutionaries who will clear out the cobwebs and detritus of the Olson Cycle and give a new birth of freedom.

This is not an endorsement of either Trump or Sanders; it is merely an attempt to explain their emergence and success. It is possible that things must still get worse before they get better: after all, William Jennings Bryan lost his challenge to elites from the left and it took a maverick like Theodore Roosevelt, the great trust-buster, to usher in a period of revolution from the right. I do not, therefore, predict a victory for either Donald Trump or Bernie Sanders. It may very well be that Ted Cruz or Marco Rubio or Hillary Rodham Clinton will win the prize, for the forces of the status quo are very strong. But I can predict with confidence that, so long as the economic and social conditions of the American people continue as they are or worsen, and so long as the government of this great nation remains incompetent and disreputable, there will be more revolutionary challengers, each more radical than the preceding one.

And because I do have faith in my countrymen, I predict with confidence that the United States will emerge stronger than ever from this current period, ready to lead the world again through whatever hardships await us in the second half of the century

Sources and Notes

[1] Also known as a Kondratiev Wave or supercycle. First described by Soviet economist Nicolai Kondratiev in 1925 in his book “The Major Economic Cycles”

[2] “The Logic of Collective Action and the Theory of Groups” (1965), “The Rise and Decline of Nations: Economic Growth, Stagflation and Social Rigidities” (1982), “Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships (2000)

[3] There are some exceptions that seem to prove the rule. Russia’s Peter the Great and Prussia’s Fredrick the Great come to mind as enlightened despots who were successful; but given that “the Great” is attached to both their names, and greatness is usually in short supply, most reforming dictators will end up like Napoleon Bonaparte – defeated in battle – or Nicolas Romanov – overthrown and shot.