Politics has a strange influence on people. People who in their daily lives seem to act quite normal are driven into various forms of madness by politics. For instance, I have friends and acquaintances on both the political Right and Left, with whom totally normal conversations and interactions may be had — unless it turns to politics.
Donald Trump is now president of the United States. He was certainly not my choice for a hand on the nuclear and drone buttons, or in charge of the American interventionist-welfare state. To me, however repugnant Trump’s personality and words may be — and they are most certainly disturbing and off-putting — he says and proposes very little that the vast majority of the other politicians holding or running for office do not, as well. He is just more blunt and obnoxious in the way he does it.
Donald Trump, the carnival con man
He reminds me of the carnival sideshow hawkers enticing us in to see their attractions by promising wondrous things through exaggeration, deception, distortion, and prurient promises, and all for the admission price of only …
Trump is sort of a P.T. Barnum brought back to life. Someone who knows how to play to people’s desires, fears, erotic fantasies, and greed for getting something that is outside the normal range of everyday life, and all for a few pennies. Hurry in, the show is about to begin in the inside.
The hawker is a borderline con man, just inside the law, and always with his suitcase packed just in case he has to make a quick getaway a few steps ahead of the local sheriff.
There are often two types of people responding to our sideshow hawker-borderline con man: those who are taken in and can’t wait to put down their two bits and get inside to see the show; and those who get up in arms and want to run him out of town on a rail because he’s clearly a crook preying upon people’s weaknesses, and a bad influence on the town’s boys and girls, who keep nagging their parents to go to the traveling carnival — especially the boys, who hope to sneak in and see the hoochie-coochie girls.
Trump’s nationalist hawking message
Indeed, Donald Trump preys on his potential supporter-victims by drawing on almost every economic fallacy in the book. You lost your job? It’s because some manipulative foreign supplier stole away your American employer’s customers through a selling swindle of offering his version of the product at a lower price.
Don’t worry, Trump is now in charge and he will create jobs by keeping foreign goods out and by talking to the bad American businessmen who want to produce somewhere else. And if they don’t respond favorably to Trump’s words, he has a big stick of special import taxes just for them if they try to import back into America what they produce outside the country at lower cost.
It’s all about products made in America and by American workers, says Trump. Our new national day of patriotism, along with promised military parades all around the country, will make us feel unified and in it together as the variety of goods decreases and their prices go up. You’re gonna feel a lot better as people are employed in wasteful and misallocated jobs that, at a minimum, slow down any improvement in our standards of living that could otherwise be ours if not for the new walls of economic protectionism.
The con man and the huckster are masters at fooling people into believing that they can have something for nothing, or if not for nothing then at half the usual price. Trump the hawker stands on his soapbox outside the tent of national promises and says, “Tell you what I’m gonna do. You will have a trillion-dollar infrastructure program to create jobs, fill in the potholes, and repair the bridges; and it’s all gonna be paid for from the jobs and products we make at home by keeping out those bad, less expensive foreign goods. Plus, we are also gonna make the American military strong and huge again so we can crush Islamic terrorists off the face of the Earth. By the way, have you seen how I wave my magic wand around the old-fashioned top hat and make a rabbit appear?”
The fact is, government gets the money it spends by taxing, borrowing, or printing it. Usually, in our day and age, it’s a combination of all three, but that is the set of alternatives. Every dollar the government taxes or borrows is one dollar less that a private individual could have spent or borrowed for a market-based consumer demand or a profit-oriented investment project.
If the central bank (in America’s case, the Federal Reserve System) prints the money to cover all or a part of the government’s borrowing needs, it ends up diluting the purchasing power of the dollar to the extent to which prices may rise over time; it redirects a portion of the scarce resources of the society toward what those in political power consider their best use rather than what the income-earning private citizens would choose in a free marketplace.
“Power to the People” — true and false
Which gets to another aspect of Donald Trump’s carnival act. In his Inaugural Address on January 20, 2017, the president said that his goal was to turn his back on the privileged and plundering Washington political elite. Instead, his goal was to return “power to the people.” But what, exactly, does that mean? In the American tradition of limited constitutional government, “power to the people,” has most certainly meant the right of the people to elect and hold accountable those who are in political office for a stipulated period of time.
But its far more fundamental meaning has been returning power to the individual citizens of the country to plan, direct, and control their own lives by ending and repealing government controls, regulations, commands, and prohibitions over the private and commercial activities of the citizenry — that is, the practical implementation of the philosophical principle heralded in the Declaration of Independence of each individual person’s right to his life, liberty, pursuit of happiness, and honestly acquired property.
But that is not what Trump means. For our new president is the fount of “the people’s” power. He speaks for them, he will act for them, and he will make America “great” again for them.
The one-man social engineer
Trump knows where and what types of jobs should be maintained or created. He knows the location for businessmen to invest their own capital in the attempt to make marketable and profitable goods and services, but within the confines of an investment arena of “America First.” He knows who is or is not a threat to America, and, therefore, who may visit, work, or live in the United States — for the good and greatness and safety of the nation as a whole.
Trump is an embodiment of what Adam Smith in his Theory of Moral Sentiments (1759) referred to as “the man of system” who views society as a great chessboard upon which he should have the power and authority to move the pieces about to create the patterns and relationships that he considers right, good, and best. This social engineer, of course, forgets or disregards the fact that each of the pawns on that great chessboard of society is a living, willing, desiring distinct individual person who would rather determine his own place, position, and relationships to others in the community of men.
It is also worth recalling Adam Smith’s additional reflection and warning in The Wealth of Nations (1776) that not only is such political planning and direction of men in society unnecessary, but also would “nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.”
Trump has made it clear enough, time after time, that he believes himself to be the most informed, intelligent, and reasonable person he knows. He needs neither council nor consultation to make the right decisions for “the people” of America. He has made it obvious through his words and his deeds that he intends to impose a wide degree of the “rule of men” — one man — rather than the rule of law, with himself as the lawmaker and lawgiver and law imposer.
What arrogance, what hubris, what a “pretense of knowledge” our new president exemplifies! These qualities have been and are present in virtually all those who seek and win political office, from the local mayor’s office to the White House. Most of those in the political arena, however, consider such presumption of ability and right to command others in society to be a trait best hidden beneath the cloak of at least some public humility and statements of merely a wish to “serve” and “give back” to society, lest their ambition for power be seen as crassly too self-serving and, thus, rejected by the voting public.
Trump practically reverses this. The people need him to act, dictate, and impose his designs for their own good precisely because he knows how to get things done, to bring back American greatness, and all through a willingness to pontificate in abusive and rude language right off the cuff. What need is there for a constitution, a legislative body in the form of the Congress, legal restraints on making war on Islamic terrorists, or using torture to get people to talk (even if they honestly and innocently have nothing to say)? After all, like Barack Obama before him, he has a telephone and a pen to get things he wants — for good or bad — through whatever he can get away with by executive order.
“What is seen” versus “what is not seen”
Trump’s supporters adore him. If Barack Obama was a savior for “hope and change” for tens of millions of people over the last eight years, Donald Trump is, now, the same for tens of millions of people (and some of them the same people) waiting for the return to American Greatness. Whether under an election banner that is more socialist or more nationalist — and usually it ends up being some blend of both — tens of millions of people hunger for “the leader” (the “deal maker”) who will guide the country, command the levers of political power, and bring them to some “promised land.”
Just as the crowds surrounding the entrance to the carnival tent listen with eyes and mouths wide open as the sideshow hawker tells about the marvels and secrets and maybe forbidden scenes that can be theirs to see inside if only they buy their ticket and enter, so those tens of millions of voters stand in hopeful and excited awe of the politician offering entrance into the political tent of jobs and “Made in America” industries, and all for the low price of a political campaign contribution and their vote on election day.
All of these — dare I say — “suckers” to political power-lusters are delusional victims of what the 19th-century French free-market economist Frédéric Bastiat called, “What is Seen and What is Not Seen.” The short-sighted citizen-voter sees the factory closed, a job lost, someone having to leave the neighborhood in which he was born and raised, and then told that it shows that America is in decline, that the country is being taken advantage of by the foreign seller who drove the domestic producer out of business.
What is not seen is that the product that used to cost, say, $100 to buy when purchased from the domestic producer may now be purchasable from a foreign supplier for, perhaps, $75, which means that consumers can obtain the good for 25 percent less, leaving them with $25 of cash in their pockets to buy things that previously they could not afford.
Those consumers have the desired product for $75 instead of $100, and are able to increase their demands for other goods and services up to that $25 of savings. That creates and increases the demands for the other goods, makes their production more profitable, and generates some of the alternative employments for those who may have lost their jobs when that American domestic producer could not match the economic efficiency of his foreign rival.
Furthermore, the foreign manufacturer does not give his product away to Americans for free. He has selected a line of production that he considers potentially profitable by devising ways of producing and selling it at a lower cost or with improved or better features and qualities. He wants the dollars he earns from selling his product for $75 so he, in turn, can return to the market as a consumer himself, or as a buyer of resources or capital equipment to maintain or expand his production capabilities.
He spends back those dollars earned in the United States to buy desired American goods and services or to import resources or capital equipment from American suppliers. Or if he does not spend those dollars himself, some other interested buyer of American goods purchases the dollars from him on the foreign exchange market. The increased export demand in America is payment for the desired goods Americans have imported into the country. They are also a part of the alternative employments that had become available because of the original domestic producer’s inability to successfully match the cost efficiencies of his foreign competitor.
This is no different than if a successful Indiana businessman devises a way to make some product for less and captures part or all of the market for his good in, say, Arizona. The Arizona businessman may have to cut back or shut down his operation in the face of his competitor from Indiana, and some or all of his workers are let go. They find alternative employments in Arizona or maybe they have to move to Kentucky for a new job and may have to learn some new work skills along the way.
But Arizona consumers are now able to buy a “Made in Indiana” product for less. They are able to increase their demand for goods they previously could not afford. The increased demand for that good increases the number of job opportunities from making different products in Arizona or perhaps in Kentucky, now.
This is one of the ways that we all experience economic progress and rising standards of living: either we are able to buy more goods for lower per unit costs or we are able to obtain improved and better-quality goods, whether their prices decrease or not.
American consumers gain what foreign taxpayers lose
But don’t foreign governments sometimes give their producers subsidies and other artificial cost advantages at the expense of American producers? Yes, they do. But American state and municipal governments also give companies artificial competitive advantages through special tax breaks, zoning variances, regulatory favors, or outright subsidies to open or expand their business activities in their part of the United States as opposed to somewhere else.
That may result in making a manufacturer in, let us say, Arkansas able to gain market share against a rival in, let us say, Vermont or New Hampshire. Should governments, whether in the international arena or around the corner in another state or town, do such things? Do they not potentially distort and wastefully misdirect industry, investment, and employment from where it would have been if all markets had been free and uninfluenced from the political hands of government, wherever and whatever that government might be? Yes, that is absolutely the case. And the world and the nation would be a better, less expensive, and more prosperous place if governments abroad and here at home would limit their actions to the protection of life, liberty, and property under an impartial rule of law.
But the answer to the abuses and privileges from the misuse of political power abroad is not to retaliate or reciprocate with similar actions by one’s own government. If a good can be imported and sold at a lower price in Ohio from either Chongqing, China, or Cheyenne, Wyoming, it does not matter from the benefit perspective of Ohioan consumers whether it is sold for less because the producer in China or Wyoming is able to do it as a result of market-based cost efficiencies or because the government in China or Wyoming has provided an import subsidy.
For the Ohioan consumers, a desired good can be purchased for less, offering them a chance to get a desired good at a price that leaves them extra money in their pocket to buy more things previously beyond their financial reach. In either case, some Ohio manufacturer may have to cut back or shut down its business. And some or all of its employees may have to find alternative employment or relocate.
The taxpayers and consumers of the foreign country whose government may have “stimulated” additional export business through subsidies or other forms of production privileges should express their concern and complaint. The foreign taxpayers are the ones left with less money in their pockets so that one of their nation’s producers may be given a financial benefit at their expense. Those foreign consumers are the ones who lose out from some of the redirection of their nation’s resources and labor force from making products they wanted and they would have been able to buy if the tax money had not been plundered from them. Instead, labor and resources were used to make other goods made available to American consumers for less than otherwise would have been the case.
Alas, these are all the things that are what Bastiat said are among the “unseen,” and which the political huckster is able to get people not to see, while he gets them to ooh and aah by directing their attention to immediately visible jobs and factories that his manipulations of the market may produce.
Trump’s opponents are collectivist sore losers
If one group of the gullible public is taken in by the carnival hawker, what about those in the community who demand driving him out of town on a rail? In the case of Donald Trump, his opponents are primarily disgruntled Democrats, sore-loser lefties, and political trough-eaters who bet on the wrong political horse in the presidential race. It is especially hard on all of them, because they were all so certain that Hillary Clinton was going to win and keep the horn-of-plenty of plunder coming their way.
They want Trump gone because he offends the aesthetic niceties that form the veneer of altruistic kindness or concern for humanity beneath which they hide their plunder-lusting, while they pick taxpayers’ pockets and arrogantly tell those they have looted that it is all for their own good and the rest of mankind because they are too stupidly uninformed to know how to spend their own money or manage their own lives.
Their anger and fears do not come from a concern for the freedom and dignity of the individual person, or the sanctity of human relationships based on voluntary association and peaceful, market betterment. They do not come from a cherishing of the institutions and the heritage of a constitutional order based on the eternal concern for the threat of tyrants who would reduce mankind to slaves and serfdoms bound to the commands of those possessing political power.
No, theirs is a frustration and fury that the reins of coercive control have passed into the “wrong hands” — hands different from theirs and used for government planning and plunder purposes different from the ones they want and desire. Theirs is an insistence on the illegitimacy of Trump’s presidency, because all are illegitimate who do not share the values and views of these soldiers for “social justice” fighting for a brighter and better collectivist future of their own imaginings.
Lost in the clash of collectivisms — between Trump’s nationalist Trumpeters and the Left’s Social Justice Sore Losers — is the “third way” of classical liberalism and its message of individual liberty, private property, free association, and limited government is being pushed, once more, out of the arena of political debate.
That makes it even more important that lovers of liberty do not become despondent and that they instead stay the course, because inescapably Trump’s variation on the statist theme will also fail. And society will especially need all its friends of freedom to sustain the idea and ideal of that true meaning of “power to the people,” that of individual freedom and free markets.
This article was originally published in the April 2017 edition of Future of Freedom.