Michael Chapman
Michael Chapman
Although the incoming Trump administration says it will cut taxes, reduce regulations, and slash wasteful government spending—all of which are good things—it also intends to enact an industrial policy to bolster US manufacturing, using interventionist tools such as tariffs, subsidies, Buy American rules, and similar commands—all of which are bad things and inherently anti-liberty.
“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25 percent tariff on ALL products coming into the United States,” wrote Trump on Truth Social. The president-elect has also threatened to impose a 60 percent tariff on all goods imported from China.
Government intervention in the economy, to nearly any degree, never works well because the government is incapable of knowing all the information that goes into, for instance, making cars or anticipating what consumers want. All that data only works harmoniously (and spontaneously) in a free market. As economist Friedrich Hayek explained, “The free market constitutes an information-gathering process, able to call up and put to use widely dispersed information that no central planning agency, let alone any individual, could know as a whole, possess or control.”
Thus, it is no mystery why the government did not invent the iPhone or Uber.
You’d think that real estate tycoon Donald Trump and venture capitalist JD Vance understood that, and perhaps they quietly do. But their proposed meddling in the market through industrial policy is a form of what Ludwig von Mises, Hayek’s mentor, called interventionism, or “a hampered market” economy. (Bear in mind that the Biden, Obama, and Bush administrations also implemented industrial policies.)
With interventionism, the government “seeks to influence the market by the intervention of its coercive power,” wrote Mises. “It desires that production and consumption should develop along lines different from those prescribed by the unhindered market, » Read More
https://www.cato.org/blog/industrial-policy-whether-republican-or-democrat-anti-liberty
