Does Trump Understand Ramifications of New Techniques and New Industries?
By Michael S. Rozeff
Does Trump understand how a free market works? From those parts of his economic proposals that make the news and big headlines, it seems he does not. He talks about old industries and jobs. He talks about tariffs and taxes, currency values, immigrants, steel, autos, oil and coal. He wants to bring back an industrial age that’s gone and an economy that’s gone, and he doesn’t aim to restore it by free markets. He wants government-made incentives. He does talk about reducing regulations for hampered industries, but he has a silly mechanical approach to that, which is eliminate two regulations for every new one adopted. Inventive special interests, lobbyists, regulators and Congressmen can easily find ways to circumvent that approach.
New industries are putting industries out of business that are more costly and can no longer compete. The ramifications of new industries are immense. If home building costs are drastically cut, how will this affect current homeowners? How will it affect thousands of municipalities? What regulations and ordinances will provide battleground struggles between the old and the new? How will the mortgage industries be affected?
If we go through a list of new industries, from biotech to nanotech and more, we wonder whether Trump and his appointees have any idea about what’s really going on in the world economy and what they should actually do that might be useful. I’m no expert on Trump’s policies or thought. I am only a casual observer who reads the occasional headline and article. To me it seems that Trump is speaking for jobs and industries that are headed for extinction or have already been sidelined by competition. In his current rhetoric and recommendations, he doesn’t seem to comprehend the dynamics of invention, application and industry even though he is reputed to have himself been an entrepreneur.
In this or any age of economic dynamism, the Austrian emphasis on the entrepreneur and the Austrian analysis of real competition easily beat the Chicago static model and beat the Keynesian macroeconomic model in terms of providing an understanding of what’s actually going on. There is no contest. Trump’s rhetoric and policies seem uninformed by the thinking of Austrian economic analysis. He is thinking in terms of industrial policy, as far as I can tell.