Yesterday I posted that the rise of Trump is a Black Swan event. A Black Swan Event is an occurrence that is an unpredicatable surprise, significant in negative impact but that, in hindsight, people believe it was to be expected.
It was only to be expected, however, if you believed that the Republican Party’s reaction to eight years of Obama’s economic collectivism would result in them electing a man with identical collectivist principles.
Do you recall when, on July 13, 2012, in Roanoke, Virginia, President Obama told American business owners that they didn’t build their businesses?
Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business – you didn’t build that. Somebody else made that happen.
This is off-the-shelf collectivist theory. The idea is that, since it would have been impossible to build your business without the infrastructure and protections offered by the government, the government – and thus the public – have a stake in your business. Your property is, in fact, collective property.
A conservative would argue that the beneficiaries of the profits from trade and commerce built the government for the purpose of supporting business. In other words, the government doesn’t have an ownership stake in business but that business owns government.
That isn’t, however, the position of collectivists. They believe that the government helped build individual businesses thus it has an ownership stake in business asssts.
Obama elaborated on this when he used the phrase “economic patriotism”. He used the term “corporate deserters” to describe American companies that use mergers with overseas firms to reduce their tax liability in the United States.
“It’s legal, but it’s not right,” Obama said. “You know, some people are calling these companies corporate deserters.”
The mergers are perfectly legal but Obama opposes them because they are not taking the collective into full consideration. The business owners are using their private property to the benefit of shareholders rather than the American collective.
This, of course, implies that self interested acts are, by definition, selfish acts. It is based on the idea that when someone creates wealth for his own benefit it benefits only himself.
Adam Smith pointed out the fallacy in this notion in 1776 in his treatise A Wealth of Nations. Smith pointed out when enterprising businesses work for their own benefit, unknowingly, they also benefit society. To earn income in a competitive market, the business must produce something others value. In Adam Smith’s eternal words, “By directing that industry in such a manner as its produce may be of greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”
This is Smith’s Invisible Hand and it is the greatest engine of economic growth, wealth creation, ease, comfort, health and welfare the world has ever known. Private property and the right to pursue self interest is the fuel that drives this engine.
It is also held in contempt by collectivists like Barack Obama and Donald Trump. Here is Trump during his speech on foreign policy.
NAFTA, as an example, has been a total disaster for the United States and has emptied our states — literally emptied our states of our manufacturing and our jobs…
Never again, only the reverse — and I have to say this strongly — never again; only the reverse will happen. We will keep our jobs and bring in new ones. There will be consequences for the companies that leave the United States only to exploit it later. They fire the people. They take advantage of the United States. There will be consequences for those companies. Never again.
Under a Trump administration, no American citizen will ever again feel that their needs come second to the citizens of a foreign country.
When Trump refers to the jobs created by entrepreneurs to create products and services as “our jobs” he is defining jobs as “ours” and, therefore, a collective asset. Jobs created by private individuals and companies using private property and private capital have become an asset of the American people according to Trump.
Trump’s notion that these are “our manufacturing jobs” is indistinguishable from Obama’s principle that “you didn’t build that” and that American businesses are part of the collective assets of the nation.
This sort of “economic patriotism” plays well with Trump Supporters. He says he will punish Americans who use private property and private capital in a manner that benefits shareholders but inadequately benefits the collective. “There will be consequences for those companies.”
Trump builds on Obama’s collectivist economic ideals with knee-jerk, “America First” patriotic nationalism. There is a name for this combination: fascism. It is a particular brand of 20th century progressive thinking most of us hoped was on the trash heap of history. Evidently, it still has legs in 21st century America.