If Attempting to Explain Economic Truths Is Arrogance, Then I’m Arrogant

(Don Boudreaux)

Tweet

Here’s a letter to a Cafe Hayek reader (links added):

Mr. Bruce E___

Mr. E___:

Thanks for your e-mail, in which you write “There is a certain arrogance in your inference that you know better than Trump about how thing work in the real world.  It is not attractive.”

You miss my point, which can be nicely summarized as follows: There is a certain arrogance in Trump’s inference that he knows better than ordinary men and women how things work in the real world.  It is not attractive.

My criticisms of Trump’s position on trade are merely my repetition of the centuries-old understanding by economists of the fuller consequences of trade that clearly escape Trump’s notice.  (Note – especially if you believe that on this front such things matter – that among the most famous of these economists was an immensely successful businessman, David Ricardo.)  Judging from Trump’s frequent commentary on trade, he sees only the particular domestic sales and jobs lost to imports and those created by exports.  His vision stops there.  Unlike economists, Trump does not see the domestic jobs created when foreigners invest their dollars in America.  Indeed, because such investments increase America’s trade deficit, he wrongly interprets them as harming Americans.  Nor does Trump see the demands for new goods and services in the U.S. that are unleashed when imports allow consumers to save money on existing goods and services by driving down their prices.

This economists’ understanding is backed by overwhelming theory and evidence, which Trump arrogantly ignores.

Returning to the particular focus of your e-mail, there’s an even deeper truth that Trump does not understand.  It is this: people in general are made worse off when their spending and investment decisions are overridden by politicians and bureaucrats.  Trump would have politicians and bureaucrats routinely override many spending and investment decisions made by individual Americans.  That, sir, is the height of arrogance.  And it is most unattractive.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030