There's piece in The American Spectator boosting Trumponomics against "neoliberal economics" of the Republican and Democratic Parties. How exactly does by Adam Korzeniewski define all this?
Here's Trumponomics:
industrial policy, national economics, immigration restriction, and skepticism of globalism, [and borrowed from Henry Clay's American System] which focused on internal improvements (infrastructure), tariffs to protect industry, and subsidies when necessary.
Here's Neoliberalism:
Neoliberalism, broadly defined, constitutes a wide range of policies, including the deregulation of markets, elimination of trade barriers, increases in immigration, and the globalization of capital flow. These policies lead to the liberal calcification of corporations and government bureaucracy. They also treat people as interchangeable components in the economy, in which individual value and cultural norms are meaningless.
Democrats add a twist:
President Biden’s neoliberal economic model leeches off the entropy of American economic power to accelerate the end of domestic industries and American jobs in favor of international corporate profits.
Hmm. Not quite. The problem is that we are mixing economics and politics here. First, let's try to understand economics and the market system.
Economics arises when people do not just produce for themselves, but exchange stuff that they have produced in return for something else, usually money. The next step is that people don't work making stuff for themselves at all; they hire out their labor, usually in return for money. And then some people work entirely in the money business, loaning money and investing in enterprises.
Obviously, this gets bloody complicated, right away. But, in another proof of God's existence, it turns out that humans can value everything that is offered for exchange by a concept we call the price system. There is no mystery about prices, as imagined by the classical economists and the Marxists. In marginal economics the price is whatever something just sold for, and whatever someone is willing to pay right now.
Thus, in a perfect world, markets would be markets, and no regulatory and tariff barriers, and anyone could work for anyone, and move to anywhere and capital, the mother's milk of enterprise, would go wherever it was most needed, all over the world.
But the world ain't perfect. Thus governments are instituted among men to protect us from pirates and plunderers. Trouble is that, as often as not, governments act as pirates and plunderers.
So, the trouble with "neoliberalism" is that it tends to bend the arc of economics to favor big global corporations that fund politicians. Which often screws the little guy.
But the trouble with Trumponomics is that "industrial policy," "infrastructure," "tariffs," and "subsidies" are all in the eye of the beholder. They all tend to benefit existing economic interests and are used to buy votes.
And the trouble with government programs in general is that they subtract from the verdict of the market, that always wants to fund the most urgent need of the consumers as expressed by the price system. So, "industrial policy" may seem like a good idea, but it will probably end up benefiting existing established interests. Ditto "tariffs" and "subsidies."
And in fact the net effect of almost all government programs is that they try to violate my Four Laws:
Socialism cannot work because it cannot compute prices (Mises). The administrative state cannot work because the Man in Washington does not have the bandwidth to run the economy (Hayek). Regulation does not work because “regulatory capture” (Stigler). Government programs cannot work because you can never reform them (Chantrill).
Whenever you violate one of my Four Laws, chances are that you are Making Things Worse. For the market giveth and the market taketh away.
The story of the last 200 years, of the Great Enrichment, is also a story of ruined dreams. The handloom weavers were put out of business by power looms. The candlemakers were put out of business by Rockefeller's illuminating oil. The stagecoaches and the carters were put out of business by railroads. The sailing ships were put out of business by steamships. The horse-breeders were put out of business by automobiles. Silent movies were put out of business by talkies. Passenger ships were put out of business by airplanes. Mom and pop stores were put out of business by megastore chains. Mainframe computers were put out of business by minicomputers, then microcomputers, then server farms. Yes, we can help the latest industry put out of business by "progress," but for how long?
You think politicians and bureaucrats are smart enough to outguess the ceaseless innovations of the market?
Look, Trumponomics is a political program to help the ordinary middle class and soften the competition from Factory Girls in China. Neoliberalism is the political program of international business and the educated class that wants to live and work anywhere in the world.
In the best of all possible worlds we would come to a compromise between the two while still remembering that there ain't no hiding from the market. Not in the long term, not in the medium term.
For the problem is always, I would say, that whenever government gets involved in the economy, you can be sure that someone is looking for a bit of loot and plunder, and the politicians are only too glad to help out.
