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In an interview with Time magazine, President Trump explained how he approaches tariffs and trade negotiations. I use the word “explained” with some trepidation because explanations imply a certain delineation of reasoning, facts and logic along with opinion and perspective. If you ask me to explain my support for abolishing rent control and I respond, “Because vests have no sleeves and turtles smell of elderberries,” have I really offered an explanation? Or have I merely revealed what passes for my thinking?
“We’re a department store, a giant department store, the biggest department store in history,” Trump “explained” at great length. “Everybody wants to come in and take from us. They’re going to come in and they’re going to pay a price for taking our treasure, for taking our jobs, for doing all of these things.”
That’s why he should be in a U.S. court, not a Salvadoran prison: He, like anyone accused of a crime, needs a chance to be convicted or cleared.
“I own the store, and I set prices,” Trump said. He will set those prices based on “statistics” and whatever else he — and he alone — deems relevant.
Now, suffice it to say, department stores don’t work like that, America is nothing like a department store and the president is in no way the owner of America or its economy. Countries trading with the U.S. don’t “take” our treasure. They sell us things that millions of consumers and businesses need or want. Trump believes that because we buy more foreign goods (he ignores our trade surplus in services) than foreigners buy from us — i.e. trade deficits — it’s proof we’re being “ripped off.” If that were true, every time you handed over your money for a coffee or a car, you’d be getting robbed. But you’ve heard these arguments before.
We’ve heard far less about how Trump’s economic “philosophy” is a fundamental repudiation of American conservative economic and political philosophy going back more than a century. We certainly haven’t heard this from most Republican politicians, even though we would if a Democratic president were philosophizing and setting tariffs along the same lines.
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Trump’s defenders often say we shouldn’t take him literally, we should take him seriously. Fair enough. I am fine with conceding he doesn’t literally think America is a department store. But he clearly thinks this analogy captures some basic truth about not only how trade and macroeconomics work, but also about his ability to outsmart the market. I don’t just mean the stock market. I mean the whole capitalist order. He — and he alone — knows how much steelmakers and coffee brewers, car manufacturers and car buyers should pay for what they need, when they need it.
Despite its crudely cartoonish form, Trump’s analogy is the essence of left-wing economic thought. The more sophisticated versions concede that a president alone cannot know enough to make such decisions. But a president relying on a team of experts and planners, equipped with the best data and techniques? Absolutely.
The realization is starting to dawn on some Republicans that their political solvency won’t last longer than President Trump’s economic irrationality.
Forget bogeymen like Karl Marx or the Bolsheviks. The basic assumption that experts can know best has served as the economic leitmotif of the broad left for all of the last 150 years. The German historicists, English Fabian Socialists, the American Progressive Party and New Dealers, the Atari Democrats of the 1970s and the “abundance” Democrats of today: To one extent or another, they all have held that economic planners and politicians can direct the economy from above better than a policy of laissez-faire can from below.
Normally, what we should be hearing from a Republican president and his supporters is the competing view, relying on the sorts of arguments made by the likes of Adam Smith, Frédéric Bastiat, Henry Hazlitt, Friedrich Hayek, Milton Friedman and Thomas Sowell. For them, the amount of information and economic coordination that goes into the price of a loaf of bread is too great, too complex and too fast-moving for a bureaucrat or a whole bureaucracy to plan around with better results than a free market. This is what Hayek famously called “the knowledge problem.”
Moreover, it formed the heart of the economic pillar of the case for the free society. The assumption that individuals and businesses know their interests better than some politician or bureaucrat is integral to the idea of liberty. Hayek again: “It is because freedom means the renunciation of direct control of individual efforts that a free society can make use of so much more knowledge than the mind of the wisest ruler could comprehend.”
Today, the default position of many on the right, to their extreme discredit, would be to amend that quote with “unless that ruler is Donald Trump.”
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Ideas expressed in the piece
- President Trump’s tariff policy is framed as a rejection of traditional conservative economics, which emphasizes free markets and decentralized decision-making. The article argues that his approach mirrors left-wing economic planning, relying on centralized control and the belief that experts—or in this case, the president alone—can outsmart market dynamics[1][2].
- The analogy of America as a “department store” owned by Trump is criticized as a flawed representation of trade, ignoring the mutual benefits of exchange and reducing complex economic interactions to a simplistic narrative of exploitation. This perspective aligns with critiques from free-market thinkers like Friedrich Hayek, who emphasized the “knowledge problem” of centralized planning[1][4].
- The article highlights a lack of ideological consistency among Republicans, noting that Trump’s policies contradict longstanding conservative principles championed by figures like Milton Friedman and Adam Smith, who argued that individuals and businesses—not policymakers—are best positioned to allocate resources efficiently[4][5].
Different views on the topic
- Proponents argue that tariffs are necessary to address trade deficits, protect domestic industries, and counter perceived exploitation by foreign nations. The White House frames the tariffs as a response to “nonreciprocal treatment” and policies like currency manipulation, aiming to strengthen national security and economic sovereignty[2][3].
- Supporters claim centralized economic intervention can correct market failures and rebuild critical supply chains, particularly in manufacturing. This aligns with Trump’s assertion that tariffs will incentivize domestic production and reduce reliance on foreign adversaries[2][5].
- Some advocates dismiss free-market critiques as outdated, arguing that globalization requires aggressive measures to protect U.S. interests. Project 2025 documents suggest tax cuts for the wealthy and deregulation could offset tariffs’ economic impacts, though critics contend this would exacerbate inequality[3][5].
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