I Want a President Who Can Teach Us to Accept Capitalism

In last week’s foreign policy speech Donald Trump had this to say about jobs:

NAFTA, as an example, has been a total disaster for the U.S. and has emptied our states of our manufacturing and our jobs. Never again. Only the reverse will happen. We will keep our jobs and bring in new ones. Their [sic] will be consequences for companies that leave the U.S. only to exploit it later.

Okay, I get it: you are running for president, Mr. Trump, and I get that you can’t say that, of course, NAFTA has hurt some people, because after all capitalism is creative destruction, but on balance NAFTA has benefited the U.S., Canada, and Mexico. And I know that you can’t tell the American people that no job is forever, because no technology, no market, no corporation, no nothing is forever. The last thing a president is allowed to do is tell us that life is tough and we just have to pick ourselves up and try something else when the market leaves us high and dry.

People insist on thinking that capitalism is accumulation. I wrote a long blog series on that Frenchie, Thomas Piketty and his often bought but seldom read Capitalism in the Twenty-first Century, where he makes the stupid point that the return on capital is greater than the growth rate. Of course it is. You can make money on lending money to another guy so he can buy a diamond for his mistress, and it does nothing for growth.

Capitalism is not about accumulating gold coins in a sack by stealing bread from the poor; it is about innovation. According to George Gilder it is surprise; according to Deirdre McCloskey it is “trade-tested betterment.” And the net result of innovation, trade-tested betterment, and surprise over the last 200 years has been an increase in per-capita income from $3 per day to $100 per day. That’s on top of an increase in world population from about 1 billion to 7 billion humans. There has been nothing like it, ever.

But the dirty little secret of capitalism is that it can only work its magic and raise up the poor from indigence if you let it destroy the commanding heights of today’s economy with surprise, with innovation, with trade-tested betterment.

Never mind all those hand-loom weavers thrown out of work by power looms. What about the keypunch operators of 1970 thrown out of work by floppy disks? What about the guys that used to earn good money calculating paper spreadsheets using ten-key adders? In the 1970s, I remember my employer buying a 50 megabyte disk drive that was the size of a washing machine and cost $15,000 or more. Today I have a 32GB chip in my $100 Android smartphone that starts playing my tunes the moment I start my car. Bully for me, but what about all those skilled disk-drive workers along Route 128 in Boston?

Usually, writes Joel Mokyr in The Gifts of Athena, the established interests down the ages have managed to smother in its cradle any innovation or surprise or trade-tested betterment that threatened their good life, and so for century after century things went on in the good old ways for the established interests and nothing changed. The astonishing thing is that the last 200 years has allowed any technological change to disrupt the establishment and its comforts.

But I have a dream, that one day this planet will have a cultural and political elite that accepts capitalism’s constant innovation and surprise and trade-tested betterment as the logical, epistemological and moral foundation of the raising up of the poor. And they would not be too shy to remold our culture, with traditional elite condescension and conceit, to ease the torments of change and teach the American people to regard with acceptance, rather than distemper, the disruptive changes that might afflict the comfortable and comfort the afflicted.

Instead we have a vile and contemptible “clerisy” of thinkers, popularizers, activists, and politicians that cruelly scratch the wounds of the afflicted. They marinate them in their tribal hatreds, trap them in dependency, tax and their wages and then play the Lady Bountiful giving it back years later, and teach them to hate the culture that has raised them, or will raise their children, out of Malthusian oblivion.

It’s great that Donald Trump wants to Make America Great Again. But what made America great was that for a season, the elite lacked the power to “keep our jobs” against some nobody with a crazy idea to demolish the status quo and surprise the world with an unlooked for invention, a trade-tested betterment, and the result was the Great Enrichment of the last 200 years.

And it really is about time that presidential candidates could dare to tell us that.

Christopher Chantrill @chrischantrill runs the go-to site on US government finances, usgovernmentspending.com. Also see his American Manifesto and get his Road to the Middle Class.