Thursday, September 1, 2016

The Fatal Conceit of Donald Trump

By Robert Wenzel

The great economist and Nobel laureate F.A. Hayek used to warn about the "fatal conceit."

In fact, he wrote a book titled. The Fatal Conceit.

Republican presidential nominee Donald Trump fancies himself the great negotiator, but in fact when it comes to politics he is much more the great planner.

Hayek warned about such political leaders. He considered the fatal conceit to be the view held by many that society can be planned to a large degree.

He held an opposite view. In his book, he stated that "order generated without design can far outstrip plans men consciously contrive."

He had in mind such things as language and money but also many other types of order that developed as a result of unplanned (at the government level) interactions between individuals. The entire market and price system also immediately comes to mind/

The fatal conceit in Hayek's mind was the view that a central planner could do a better job of such order creation.

This Hayekian observation comes to mind because of Trump's "Immigration Speech" last night. There are many things to object to in the speech because of its general authoritarian/police state tone and I have addressed these problems, in his speech, elsewhere.

Here I want to discuss another part of the speech. It is the part of the speech where Trump displayed fatal conceit, as Hayek identified it.

Specifically, it is when Trump said during the speech:
The time has come for new immigration commission to develop a new set of reforms to our legal immigration system in order to achieve the following goals:
To keep immigration levels, measured by population share, within historical norms. 
To select immigrants based on their likelihood of success in U.S. society, and their ability to be financially self-sufficient. We need a system that serves our needs – remember, it’s America First.
To choose immigrants based on merit, skill and proficiency.
But who is Trump to tell us that immigration levels must be kept within historical norms?

Perhaps if immigration operated based on free market principles, where a welfare wall would be erected so that new arriving immigrants would not able to get support from the government, the number of immigrants might be less. Or the number might be more. But just how does Trump think he knows what this exact number should be?

Remarkably, he went on to say that, in the United States where the government determines entry of immigrants, immigrants should be allowed in based on  "merit, skill and proficiency."

But where  does Trump get the idea that the United States needs only skilled and proficient immigrants? Perhaps what is needed is unskilled immigrants lacking any special proficiency, who will, say, take care of our lawns and clean our homes and offices.

What is wrong with the markets determining through free exchange who enters the country?

I hasten to add that I am not an advocate of the current immigration system where the government sets immigrant quotas for various countries based on the interests of the government and its political leaders, And I am certainly not in favor of handouts and support of any kind from the government for incoming immigrants. But the solution is not a different central plan that picks immigrant winners and losers, as if this could somehow be done successfully by a central planner. It is Hayek's fatal conceit to think that such a plan would somehow create the best outcome.

As Hayek taught us, it is not by government planner dictates that we can be sure that outcomes are always positive. It is only when exchanges occur by freely exchanging individuals that we can know that all involved view the exchange as beneficial.

Donald Trump has a very simple pedestrian view of how the world works. It is a very popular view but it is in error. The world is much, much too complex to be planned in any detail be any man or group of men. The only viable option for a growing economy and standard of living is to allow free exchange, where each individual from his unique perspective decides what actions he wants to take.

When everyone makes his and her own decisions/exchanges then the general trend will be toward an improving order, not designed by anyone, not even Donald Trump. In this way, individuals will attempt to advance their own well being. The economic and general advancement through individual interaction that brought us language and money surely can solve the immigration "problem."

Robert Wenzel is Editor & Publisher of and Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics and on LinkedIn.


  1. Agree. We should have an auction for immigration slots. Set a number, 100,000 will be let in this year and let the prospects bid a price for each one. If you want to bring your wife and kid you need to purchase three slots.

  2. All correct, Robert. But since the reality is we are facing either a Trump Presidency or a Hillary Presidency, which do you think would be less abysmal and why?

  3. This is great writing. Very well said.

  4. 15 million illegals. One candidate will deport, the other will give sanctuary.

  5. Libertarian whining about freedom and immigration is amusing.

    Yes one can pick immigration winners and losers.

    Whites and some east Asians = winners.
    All the rest = losers.

    Trump is also not telling us, he has listened to White America that has always been against Hart-Cellar and responded.

    1. Still angry at yourself for being a libertarian, former libertarian?

  6. Bob, I've enjoyed your posts on Trump and Clinton, as well as your exchanges with Walter Block (whom I also think has made compelling arguments). Since both candidates are likely very bad from a liberty perspective, I agree libertarians should be arguing against both and educating others as much as possible. I do not support "Libertarians for [Anyone]," nor Johnson/Weld, who are just slightly less-bad and will not be helpful to those who conflate the ideology with the party.

    The main problem I have with your analysis of Trump is that what he says probably has less correlation with what he will do than for most people. He wants to get elected, first and foremost. Principles be damned. Where he has actually said anything substantive, he has often later shifted his stance, and I expect will continue to do whatever he believes will help him in the polls.

    A Clinton presidency will likely be bad, and because she has a long track record of being bad, we can assume a relatively narrow distribution of possible outcomes. A Trump presidency will likely be bad, but because he doesn't have the same track record to observe, there is a much wider variance. He may be much worse, or he may be much better. And we have no way of predicting or testing our opinions.

    Trump has been an extremely polarizing character and much of what he says is vague or even directly contradictory to other things he says. If one has a particular preconception (e.g. Hillary is horrible or Trump is a maniac), anything Trump says is interpreted through that view (he told Russia to hack the United States! Treason!).

    I think most of the world has fallen into a confirmation bias trap.

  7. I would imagine in a Libertarian society.... people that come with tradable "trinkets" would be accepted, and maybe even sought after.... people that come with poverty, might be less desirable, and maybe even rejected...

    But even impoverished, or skilless, or possibly illiterate immigrants, might have a relative that champions this newcomer, and provides a room and food. Which makes the burden less of a village concern or worry.

    Some say, if a nation was like a Star-Trek ship, inviting the tired and poor would doom the entire space mission, and possibly lead to failure.

    Some say, putting the poem of communist "Miss Lazarus" on the gift from France, needs to be fixed by changing the word "tired" to "energetic", and poor to "talented".