Here’s a letter to a long-time friend.
R__:
It’s always good to hear from you.
In response to my letter pointing out that Trump contradicts himself in wishing both to reduce U.S. trade deficits and to ban diesel exports, you write “I don’t agree with Trump’s protectionism any more than you do, but this contradiction theoretically has a simple explanation: he wants people to buy our stuff, except the stuff we need for ourselves.”
Trump would undoubtedly offer such an explanation, but it would fail.
Consider his (bananas) complaint about Americans’ imports of bananas raising U.S. trade deficits: “If we buy $2 billion worth of bananas from Brazil, we’re actually losing $2 billion. So if we stop eating bananas, we actually save $2 billion.” This complaint reveals Trump’s embrace of the mercantilist fallacy that wealth is money rather than access to goods and services that money buys. And so by advocating that we Americans be prevented from exporting diesel, Trump advocates – by his lights – that we Americans be prevented from enriching ourselves with the money we’d earn on exports of diesel.
Trump’s ‘philosophy’ of trade is that we ‘lose’ insofar as we import (because imports are paid for with money) and ‘win’ insofar as we export (because exports bring in money). But because this ‘philosophy’ is absurd, it inevitably races head-long into hard realities that even he must acknowledge – such as that truckers run their rigs on diesel, not dollars.
What your theoretical defense of Trump amounts to is the claim that Trump gets to pick and choose which goods (e.g., diesel) are worth to Americans more than the dollars at which they sell, and which goods (e.g., bananas) are worth to Americans less than the dollars at which they sell. But surely the people in the best position to make these assessments are not politicians and bureaucrats but, rather, ordinary Americans, who are spending their own money.
Subscribers to a political movement that prides itself on refusing to be bullied by arrogant elites should reject such arrogance.
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
