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Friday, November 11, 2016

TGIF: How the Ruling Class Created Trump

Mixed emotions over the election are entirely in order. I rejoice at the repudiation of the ruling elite while recoiling from horrific thing that has been embraced. Only about 57 percent of the 231,556,622 eligible voters cast ballots, but many of the stay-at-homes were also repudiating the ruling class. Donald Trump won a just over 60 million votes, somewhat fewer than Mitt Romney won, while Hillary Clinton won 60.4 million votes, far fewer than Barack Obama won four years ago. Hence while Trump won only about a quarter of eligible voters, he won enough actual voters in states that had twice supported Obama to win a majority of electoral votes. The lack of support for Clinton -- including the nonvoters who had previously voted for Obama -- constitutes a repudiation of the establishment.

Some degree of disbelief is also in order (will we be less interested to polls now?), but maybe we should have seen this coming. Trump's victory is an unintended bequest from the bipartisan political establishment that has ruled us all these years. For as long as anyone can remember, the four branches of government (I include the independent agencies, among them the Federal Reserve) have managed "the economy"; that is, in important ways they have set the terms of our peaceful productive transactions. ("The economy" is an abstraction that stands for people consensually producing and exchanging goods and services.) Predictably, because of that top-down management, we have reaped low growth, distorted growth, illusory and discoordinating booms, and brutal but corrective busts, followed by increasingly anemic recoveries due to the cumulative burdens of government in the form of privileges, regulations, mandates, and taxes. Adding to the hardship, especially in the most vulnerable communities, is the ruling elite's control of schools.

As a result, many people (particularly the majority without college education) have it tough and see no prospect of dramatic improvement for themselves or their children. Many have hardly recovered from the Great Recession, the product primarily of bipartisan government housing policy. (No, Wall Street couldn't have done it alone.)

For decades regular people have looked to the political class to save them because that's what they've been taught to do -- by the politicians, the schools, the media, by virtually all "experts" and "authorities." What they haven't realized is that they have looked for help from the very source of their woes: the state.

This suited the politicians of both major parties just fine. They made extravagant promises year after year, assuring the people that prosperity for all required just one more vote of confidence on election day. And for years people believed them and hoped they would finally deliver. But they did not, because they could not. Since government interference with our peaceful exchanges created the problems in the first place, no one should have thought that more or different interference would solve those problem. But to see this requires skill in the economic way of thinking, which most people lack when it comes to public policy. (They largely get it at the personal level.) It takes economic understanding to see what's behind our systemic economic difficulties and to spot the bogus solutions offered by politicians of all stripes.

After decades of broken promises and impotence, a sufficient number of people were bound to become fed up with the arrogant class of politicians, bureaucrats and experts who took their support for granted. Moreover, economic hardship in turn fanned the fear of foreigners, both as traders and immigrants, which the Republican Party in particular exploited; prosperous people tend to have little time or reason to look for scapegoats. So the establishment has given us both insecurity, despair, and xenophobic nationalism. Thank you very much.

The result is Donald Trump, who bashed the elites for their betrayal and/or incompetence. He deftly positioned himself as an outsider who would succor the disfranchised and forgotten, and redress imagined grievances at hands of the world. This, not racism or a backlash against political correctness, is primarily why he won. In fact, Trump was an insider who came from the demand side, rather than the supply side, of the establishment, a fact he acknowledges. His aggrieved-nation shtick, moreover, prevented him from seeing the destructive and economically draining U.S. empire for what it is. But Clinton's shameful career -- which epitomized the ruling elite -- prompted too many people to vote Trump or to stay home.

But what does Trump promise? His signature economic causes are trade and immigration restrictions. He says these would create, among other benefits, high-paying and secure jobs -- as though Americans are suffering from too many low-priced imports and too many immigrants. In fact, they are not. Wealth consists in increasingly easier access to goods and services, and access to goods and services is facilitated by free trade in the widest possible marketplace and the movement of enterprising individuals from low-productivity capital-poor areas to high-productivity capital-rich areas -- in other words, immigration to the United States. Low-skill manufacturing jobs will be done either by low-skilled people in developing countries or, barring that, by robots in the United States (and elsewhere). Trump will not be able to bring back the manufacturing jobs that many Americans held when every industrial nation but the United States was digging out of World War II's rubble. But it won't be because Americans don't make anything anymore. Today U.S. businesses make and export goods at historically high levels, but because productivity has grown so dramatically, they can do it with fewer people, just as agriculture does. (Why doesn't Trump promise to bring back "our" farm jobs? The number of manufacturing jobs has been falling for 40 years, since before NAFTA and the WTO.)

In other words, Trump's presentation and promises are out of sync with reality. He too will fail to deliver, although he has succeeded in feeding people's fear of foreigners, both traders and immigrants. Knowingly or not, Trump misleads people who are on hard times while ignoring what they need: the dynamic entrepreneurship and innovation that a freed economy (that is, freed people) would ignite.

Note that Trump promises to "fix," not free, the economy. His campaign showed no understanding whatever of the spontaneous, emergent nature of economic progress, the fruit of exchanges between free individuals. He merely promises economic management by smarter people -- himself foremost -- but economic management just the same. Thus at the deepest level, the self-styled establishment-slayer reveals himself as a man of the establishment. A true radical who understood what ails us would have promised at least to begin the process of ending subsidies and bailouts (privileges), regulations (including trade and immigration restrictions), spending (especially on the military), and taxes -- all restrictions on freedom -- in order to free people to engage in the exchanges that improve their lives.

Trump is just another flavor in the establishment's ice-cream parlor. (His tax-cut talk is undermined by his humongous military and infrastructure spending plans, and his knee-bend to deregulation sounds more like something fed by the teleprompter.) Trump sees himself as the next CEO of the U.S. economy, indeed, of the country; but governments don't face a market tests because, unlike consumers, taxpayers can't say, "No thank you. I'll take my business elsewhere." Without that feedback, government is simply a bumbling bureaucracy. Trump won't be able to change that.

So here we are, again on the verge of broken promises and, one hopes finally, thoroughgoing disillusionment. The question is whether disillusionment with Trump will translate to disillusionment with the state. That's where we libertarians come in.

TGIF (The Goal Is Freedom) appears on Fridays. Sheldon Richman, author of America's Counter-Revolution: The Constitution Revisited, keeps the blog Free Association and is executive editor of The Libertarian Institute. He is also a senior fellow and chair of the trustees of the Center for a Stateless Society and a contributing editor at Become a Free Association patron today!


Shane Skekel said...

It appears that my notion of Trump's election being a Pyrrhic Victory was correct after all. By the way, I'm trying to convince a Newgrounds Leftist that state meddling caused the Economic Bust. Anything to say to the likes of Emily Youcis, Sam T Nelson, Sirkowski, Zornuzkull, Kevin Landry (Asthmatic Hamster), Adam Holland (Hogabeast), etc.?

Anonymous said...


I agree with your article except on immigration. I used to be for open borders. Hans Hermann-Hoppe changed my mind.

cat's paw said...


Who else changed your mind? Stefan Molyneux?

Anonymous said...

Two dimensions to the open borders topic: ideal and here-and-now.
In the idealistic open borders side to be against open borders means to be against the whole concept of natural rights. But even libertarian contracualists, who reject the rhetoric of natural rights and natural law, seem to be in favor of open borders both in principle and in the here-and-now. But some libertarians who are in principle natural law advocates seem to take the difficult way and defend in the here-and-now what is impossible to defend as an ideal.
We really shouldn't allow bad immigrants (those who will be used politically to erode even more liberty) to come in. But there is really no political authority to prevent it, and we cannot throw out american natural born citizens who also will be (happily) used politically to destroy civilization. We can save civilization from global tyrany by being tyrants and corrupting the whole libertarian message. I really don't like the machiavellian-hoppean point of view.

On the other hand, pro-open borders libertarians seem to like a little bit too much many political horrors we suffer, such as the idea that Governments should correct the bad behavior of whites toward blacks. They are prey of the divide and conquer strategy, and proud of it. That was a very slant slippery-slope that brought us to the nightmare of political control over food production and consumption (Giulianni anyone?), medicalization of everyday life, politicized science, and the utmost corruption of education of the public. Open borders libertarians are not doing a very good job of denouncing what is at hand. It is far safer to denounce the pains of third world countries and toy around with monetarism.

As I see the problem, anyone who wants open borders should first defend what Laurence Vance always defends: putting and end to all welfare programs (for corporations and for real persons). Then, once science, culture, medicine, education, food, industry, commerce, security, money, justice and law have been returned to the people, then I say no one but a communist or a fascist will dare to speak against all forms of migration.

Only a few libertarians seem to beleive that property, liberty, self-defense and life are sacred, unquestionable, non-negotiable, and many libertarians on the left and on the right seem to not take natural rights seriously, I can only pray that these inconsistent libertarians deserve to be told by their Governments when and where can the go.

Anonymous said...

Molyneux reinforced my changed mind, but didn't actually change my mind. The so-called natural born 14th Amendment citizens are not citizens. That's not what the 14th amendment says.