Mr. Abhi Desai
Stanford University
Mr. Desai:
In the Stanford Review (“Hoover’s Neoconservatism Can’t Last,” Feb. 21) you write about the Hoover Institution that it
has been out of sync with the conservative base for years. On trade and globalization, its economists cling to pre-Trump free-trade absolutism. One Hoover-published article recently called Trump’s tariffs a “tragedy” that undermines decades of progress. But GOP voters no longer buy the old gospel. After decades of offshoring and economic hollowing-out, today’s conservatives care more about factories at home than trade pacts abroad. Yet Hoover’s scholars still talk as if “protectionism” is heresy.
From foreign wars to trade policy, Hoover keeps defending a dead consensus. The Institution is still operating under the assumption that Republican voters will automatically back wars and globalist economics if wrapped in patriotic rhetoric. That assumption has collapsed under Trump. But Ferguson acts as if the assumption is true.
With respect, Mr. Desai, you – a student at an elite institution – can surely do better than this. Where, for example, is your evidence of the “economic hollowing-out”? Had you consulted the data (rather than merely repeated a phrase uttered ad nauseam by people who are ignorant of the data) you’d have discovered that U.S. industrial capacity is today at an all-time high – that the inflation-adjusted value of the capital stock in America reached an all-time high in 2019 (the last year for which we have good data) – that the real value-added by U.S. manufacturing has, in the past twenty years, risen by 29 percent – that real value-added per manufacturing worker in the U.S. is not only the highest in the world but a whopping 45 percent greater than in South Korea, the country where this value-added is second-highest – and that the real net worth of nonfinancial corporations in the U.S. hit its all-time peak in the fourth quarter of 2021 and is today (the third quarter of 2024) not far off that all-time peak.*
And since when is the validity of an intellectual argument determined by whether or not it’s currently en vogue with voters? That you seem to subscribe to this dubious epistemology makes it especially galling that you describe the case for free trade as “old gospel.” It’s no such thing. This case is built on 250 years of careful economic theorizing. And it has been repeatedly tested – by both history and formal empirical studies – and found to explain observable reality far better than its protectionist alternatives. Those who are preaching a gospel on this front aren’t free traders, but protectionists who have nothing but blind faith to support their insistence that government can perform the miraculous feat of increasing its citizens’ access to goods, services, and capital by restricting its citizens’ access to goods, services, and capital.
Please, rather than swallowing whole the latest popular notions about public policy, use what I’m sure is your unusual intelligence to think and write intelligently about public policy.
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
* I converted the nominal dollar figures for net worth of nonfinancial corporations into 2024 dollars using this GDP Deflator calculator.
…..
(For alerting me to Desai’s essay, I thank David Henderson.)
