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Turgot and an Early Theory of Progress

Blog Post | Progress Studies

Turgot and an Early Theory of Progress

Turgot, a French statesman, economist, and early advocate of economic liberalism, was one of the first to ponder how we achieve moral and material progress.

Summary: Progress, though central to modern life, was rarely thought about until the last two centuries. During the Enlightenment, thinkers such as Anne Robert Jacques Turgot connected freedom with progress, emphasizing the unique human capacity for cumulative knowledge. Turgot’s ideas laid some of the groundwork for modern liberalism and economic theory, influencing thinkers and policies long after his time.


Progress through the Ages

Though progress is an essential ingredient of modern life, it is an ideal that has only been acknowledged, discussed, and debated extensively in the last two hundred years. At first, it might seem odd to say large swathes of people did not always think deeply about progress. But this view ignores that the vast majority of our distant ancestors used the same tools in their daily lives that their ancestors, from hundreds of years in the past, had used in their time.

Broadly speaking, the Greeks and Romans viewed civilization like any other living organism; it grows then dies like all living things. The expected historical norm was the cyclical rising and falling of civilizations. Though some, such as the Epicurean philosopher Lucretius, theorized briefly about progress, this was an idiosyncratic line of inquiry at the time. Medieval thinkers viewed their age as a dark period in the shadow of an illustrious past. The word “progress” was alien to the human lexicon for thousands of years.

But this changed dramatically with the Enlightenment, a European intellectual movement characterized, in part, by a new confidence in the power of reason to catalog, observe, and experiment upon our natural environment. An advocate for Enlightenment ideals and ambassador for liberalism in its early days, Anne Robert Jacques Turgot, was among the earliest to examine the dynamics of progress. Importantly for classical liberals and libertarians alike, Turgot was the first to establish the connection between freedom and progress. Turgot believed without freedom, human progress would revert to cycles of development and decline.

Turgot’s Life, Education, and Career

Turgot was born in Paris to a distinguished Norman family that had long served the French monarchy as royal officials. Turgot’s father was Michel Michel-​Étienne, a Councillor of the Parliament of Paris and one of the senior administrators in the city of Paris. His mother, Dame Madeleine-​Françoise Martineau, was a renowned intellectual and aristocrat.

Turgot, as the youngest son in his family, was expected to join the church, the usual career path for a younger son in 18th-​century Europe. He began studying at the Sorbonne in 1749, but after a year, he decided he could not become a priest because he refused to conceal his beliefs that were at variance with the teachings of the church. Turgot was suited to being a student; he studied voraciously, reading history, literature, philosophy, and the natural sciences, interests he would maintain until his death.

Sorbonne Lectures: Early Ideas on Progress

While studying at the Sorbonne, Turgot made his intellectual gifts known and was elected by his fellow students to the position of Prieur. This mostly honorary position called for an occasional speech to be delivered publicly. The content of these speeches was inspired by Turgot’s interaction with Bishop Bossuet and his idea of “universal history.” Turgot’s innovation was to give a secularized account of humanity’s universal history. Turgot, like the ancients, accepted that all things live and then die. However, he maintained that humans have a unique capacity for language and memory, allowing them to pass down knowledge that accumulates incrementally over the centuries, leading to ever-​increasing stores of knowledge for the whole of humanity. Though this may seem like a simple idea today, for the time, it was revolutionary, and these speeches established Turgot at a young age as France’s foremost thinker on progress.

One of his speeches now survives as an essay entitled “A Philosophical Review of the Successive Advances of the Human Mind.” It is debatable whether Turgot is the first person to theorize about progress, but we can say with certainty that Turgot is best known for identifying the relationship between freedom and progress.

Turgot’s “A Philosophical Review of the Successive Advances of the Human Mind”

Unlike his inspiration, Bishop Bossuet, Turgot articulated a secular account of progress. Turgot does not entirely exile God from the discussion, but he relegates God to being a prime mover rather than a prime intervener in human affairs. For Turgot, progress does not come from divine providence but is a uniquely human phenomenon.

Turgot defined stages of civilizational development, beginning with hunting, then pastoral, and finally agricultural. Two years prior, in 1748, in The Spirit of the LawsMontesquieu had done the same. However, Montesquieu used these stages to illustrate how topography and climate influence human activity. Turgot’s stages are not separated by varying climates but by human developmental differences. Turgot argued human activity and civilization are influenced not only by climate and topography but also by degrees of social development, progress is not a mere descriptive conclusion; in Robert Nisbet’s words, “it is a method, a logic, of inquiry.”

Where Does Progress Come From?

For Turgot, the natural world is an unending cyclical succession of death and life —whereas human civilization shows signs not of constant decay but rather ever more vitality. Humans are unique creatures because of their capacity for language, writing, and memory. Because of these capacities, the knowledge of particular individuals becomes “a common treasure-​house which one generation transmits to another, an inheritance which is always being enlarged by the discoveries of each age.”

All humans have the same potential for progress. However, nature distributes our talents unevenly. Our talents are made practical by a long chain of circumstances. Turgot wrote, “Circumstances either develop these talents or allow them to become buried in obscurity.” But from this infinite variety of circumstances, progress slowly develops unequally at first, but its benefits spread to the whole human species over time.

Humans’ collective capacity for memory means that even amidst war, famine, and disaster, they can preserve and continuously improve their knowledge of the world. Writing prophetically before the economic miracle of liberalism, Turgot says, “Amid all the ignorance, progress is imperceptibly taking place and preparing for the brilliant achievements of later centuries; beneath this soil the feeble roots of a far-​off harvest are already developing.”

Progress Requires Experimentation

Unlike many of his philosophical contemporaries, Turgot greatly admired artisans and mechanics, people who worked with their hands to create new machines. Unlike Rene Descartes, Turgot did not believe the greatness of his century came from a superior set of ideals, attributing it instead to new inventions. Ultimately, Turgot believed we were indebted to artisans rather than philosophers for much of the comforts in our daily lives.

Behind all science lies experimentation. Turgot understood he could not give a complete account of how progress would unfold because a large part of it was down to chance and unique circumstances. He wrote, “Any art cultivated over a period of centuries is bound to fall into the hands of some inventive genius.” Turgot elaborates, “Chances lead to a host of discoveries, and chances multiply with time. A child’s play can reveal the telescope, improve optics, and extend the boundaries of the universe in great and little ways.” This might seem like fanciful thinking, but when Alexander Fleming discovered penicillin, it was due to a simple mistake that yielded a crucial element of modern medicine, while Edison had to experiment over 1000 times before creating an effective light bulb which thereafter illuminated the entire world. There is no set path for progress to take. That is why we must leave people the maximum freedom to experiment and try new ideas to maximize future progress.

Obstacles to Progress

Turgot feared the main impediments to progress were conventional thinking and concentrated interests that benefited from the status quo. Turgot believed a concentration of power in any area would lead to stagnation and decay in all aspects of life, whether cultural, economic, or political. Inherited ideas, or what John Stuart Mill would later call, “dead dogma,” stop people from appreciating new knowledge. Turgot recommended we follow the facts because, “The greatest genius will not question a theory unless he is driven by facts.”

Turgot’s Laissez Faire Economics

After his time in the Sorbonne, Turgot turned his attention to politics. In 1752, he started climbing the political ladder as a substitut and later a conseiller in the Parliament of Paris. While living in Paris, he frequented salons, gathering places for intellectuals to come together to debate and discuss ideas. While attending, Turgot met the intendant of commerce, Jacques Vincent de Gournay, the man perhaps best known for popularizing the term laissez-​faire economics. In an effort to promote the study of economics, de Gournay gathered a group of young men, including Turgot.

During this time, Turgot became acquainted with physiocrats such as Quesnay, who argued that the state should not regulate commerce to promote economic growth, but leave markets free. Inspired by his mentor de Gournay and his friends like Quesnay, Turgot became one of the foremost advocates of free trade in France, if not the whole of Europe, before the days of Adam Smith.

When de Gournay died in 1759, Turgot wrote a fitting eulogy that summarized de Gournay’s beliefs while expanding Turgot’s own positions on how best to run an economy. The result is a short essay entitled “In Praise of de Gournay,” where Turgot develops his laissez-​faire philosophy.

Establishing the Idea of Economic Liberty

Turgot’s eulogy is the most complete statement of his economic beliefs that survives. Speaking on his mentor’s behalf, Turgot argues that, “The general freedom of buying and selling is therefore the only means of assuring, on the one hand, the seller of a price sufficient to encourage production, and on the other hand, the consumer, of the best merchandise at the lowest price.” Turgot, like de Gournay, believed that if people were left free to make their own decisions, there would not be anarchy like people expected, but instead harmony. Individuals, driven by self-​interest, make their own decisions with the information available to them, and by acting on their own interests, they unwittingly promote the interests of the whole of society.

Many of the regulations governments impose are attempts at stopping fraudulent sales or scams. Turgot wrote that, “To suppose all consumers to be dupes, and all merchants and manufacturers to be cheats, has the effect of authorizing them to be so, and of degrading all the working members of the community.” On top of regulations, the government imposed a long list of different taxes on every kind of labor. Turgot believed a more concise and understandable tax system would help repair France’s then-​failing economy.

Turgot’s thinking on spontaneous order anticipates that of later scholars like F.A. Hayek. Turgot argues that complex systems, such as economies or whole societies, emerge and organize without central planning. The idea of spontaneous order challenges the misconception that only top-​down, state-​run authorities can craft efficient and free societies. Turgot asserts that the doctrine of laissez-​faire “was founded on the complete impossibility of directing, by invariant rules and by continuous inspection a multitude of transactions which by their immensity alone could not be fully known, and which, moreover, are continually dependent on a multitude of ever-​changing circumstances which cannot be managed or even foreseen.” In short, almost 200 years before Hayek’s “The Use of Knowledge in Society,” Turgot was arguing that an individual, group of individuals or even an entire government would never have access to the mountains of information required to “manage” the economy.

Like his mentor, Turgot was for free trade and a government that mostly stayed away from trying to manage the minutiae of the economy. Turgot believed people did not need to be managed; quite the opposite, their productive energies needed to be unleashed upon the world.

Political Career

Though a prominent theoretician on economic and philosophical matters, Turgot was never an academic. Though academically gifted, Turgot wanted more than for his ideas to be discussed in salons; he wanted them to be implemented for the benefit of France. In 1761, Turgot was appointed as the tax collector of Limoges. Turgot eliminated complicated taxes and abolished the despised corvée, a form of unpaid labor demanded in lieu of taxes. Throughout his time in Limoges, Turgot dedicated himself to removing obstacles in the way of the poorest in society earning their daily bread. By 1773, when Turgot left, Limoges was one of France’s more prosperous areas; as a reward for his achievement, he was appointed as Controller General of France by Louis XVI.

With his new position, Turgot had ambitious plans. He aimed to implement several economic reforms, including free trade, reducing the lower classes’ financial burdens, and removing feudal privileges. Turgot’s reforms faced strong opposition from powerful concentrated interest groups among the day’s nobility, clergy, and guilds. Ultimately, Turgot resigned in 1776, never holding a political position again. He spent his final years at his family estate, buried in his studies and correspondence, dying at the age of fifty-​four.

Turgot’s Importance to the History of Liberalism

Though unsuccessful in his reforms, Turgot’s efforts put laissez faire and liberalism on the political map. They were no longer mere theories but practical policies. The writings of Turgot are still valuable because they help remind us of a simple yet fundamental truth: that progress consists not in merely more capital goods but in an ever-​increasing store of cumulative knowledge. His writings also illustrate that progress was a relatively rare phenomenon before the Enlightenment, only experienced in brief glimpses by select pockets of the human population. Despite being a busy and politically engaged figure, Turgot’s ideas nonetheless had a massive impact on the intellectual history of the Western world.

Legacy of Turgot

It is difficult to overstate the impact of Turgot’s ideas and work as a politician. He has garnered many admirers, including the economist Joseph Schumpeter and libertarian thinkers like Murray Rothbard. Turgot’s career in economics was brief but brilliant. Thinkers like Turgot, his mentor Vincent Gournay, and his friend François Quesnay were responsible for France being among the first countries to implement laissez faire economic policy and for integrating liberal ideas into the public consciousness. Without the intellectual and political efforts of people like Turgot, liberalism and economic freedom might have remained obscure ideas relegated to a select group of obscure intellectuals.

A version of this article was published at Libertarianism.org on 11/14/2023.

TechCrunch | Manufacturing

InventWood to Produce Wood That’s Stronger than Steel

“It sounds like the stuff of science fiction, but it actually comes from a lab in Maryland.

In 2018, Liangbing Hu, a materials scientist at the University of Maryland, devised a way to turn ordinary wood into a material stronger than steel. It seemed like yet another headline-grabbing discovery that wouldn’t make it out of the lab.

‘All these people came to him,’ said Alex Lau, CEO of InventWood, ‘He’s like, OK, this is amazing, but I’m a university professor. I don’t know quite what to do about it.’

Rather than give up, Hu spent the next few years refining the technology, reducing the time it took to make the material from more than a week to a few hours. Soon, it was ready to commercialize, and he licensed the technology to InventWood.

Now, the startup’s first batches of Superwood will be produced starting this summer.”

From TechCrunch.

Waypoint | Manufacturing

Waymo Scales Its Fleet Through US Manufacturing

“Scaling Waymo One and meeting the increasing demand of our riders requires a growing fleet of vehicles integrated with our generalizable Waymo Driver. To support our growing U.S. ridership, we’re investing in our American manufacturing operation with a new autonomous vehicle factory in Metro Phoenix with our partners at Magna…

With the need to build multiple platforms simultaneously and at higher volumes, the plant will introduce an automated assembly line and other efficiencies over time. When the facility is operating at full capacity, it will be capable of building tens of thousands of fully autonomous Waymo vehicles per year.”

From Waypoint.

UN Trade and Development | Trade

Global Trade Hits Record $33 Trillion in 2024

“Global trade hit a record $33 trillion in 2024, expanding 3.7% ($1.2 trillion), according to the latest Global Trade Update by UN Trade and Development (UNCTAD), which warns that while trade remains strong, uncertainty looms in 2025…

Developing economies outpaced developed nations, with imports and exports rising 4% for the year and 2% in the fourth quarter, driven mainly by East and South Asia. South-South trade expanded 5% annually and 4% in the last quarter.

Chain and India outperformed global trade averages. In contrast, trade in the Russian Federation, South Africa, and Brazil remained sluggish for most of the year, with some improvement in the fourth quarter.

Meanwhile, developed economies’ trade stagnated, with imports and exports flat for the year and down 2% in the last quarter.”

From UN Trade and Development.

Blog Post | Trade

An Update on the Trump Tariffs | Podcast Highlights

Scott Lincicome joins Marian Tupy to discuss how President Trump's trade policies will affect American prosperity, national security, government revenue, and industry.

Listen to the podcast or read the full transcript here.

Why is trade important to human progress?

Trade helps us access goods and services from around the world at low prices. That improves our living standards, allows our wages to go further, and makes life more fun. Thanks to international trade, we have year-round access to fruits and vegetables that used to be seasonal or simply not available at all.

But it’s deeper than that. Trade is part of the great prosperity machine of free markets. Individuals trade not only goods and services but also for knowledge. That boosts our society and prosperity. It allows for innovation, either via competition or by importing innovations from abroad. Trade also allows individuals to learn about other places. And in general, trade tempers the desire to go to war. You don’t want to kill your customers. And that helps make the world a little safer.

Now, let’s assume that you don’t like foreigners. You think they are nasty don’t treat us fairly and whatever else. We have 350 million people in America. Why can’t we make everything we need here?

We technically could make everything ourselves, especially in a place like the United States, but that would just make us poorer and less productive.

I’ll give you a good example. It pays about $12 an hour to work at a T-shirt manufacturing plant in South Carolina. It pays much more to go work at Amazon or Costco. So why not purchase T-shirts from a place like Guatemala, where working in a T-shirt factory is a good, high-paying job? It just makes sense for us to trade for those things and not force American workers into those low-wage jobs.

Instead of making clothes and shoes, we can outsource those things and focus instead on higher-value production. We can work in tech, services, or advanced manufacturing. That specialization is critically important for raising living standards.

Trade is also about opportunity cost. At any given time, we only have a set amount of raw materials, workers, and capital, and if you devote those resources to lower-value production, those resources can’t flow to higher-value options. This is part of the unseen aspect of protectionism. When we put tariffs on washing machines, we might get a washing machine plant in South Carolina, but what we don’t see is that all of the resources that went to making and operating that factory could have been deployed in more productive endeavors if we had just simply bought washing machines from abroad.

Resources are also wasted on the consumer side. If you and I are forced to spend an extra hundred dollars on a washing machine, that’s money we can’t spend elsewhere in the economy. Those washing machine tariffs I mentioned created about 1000 washing machine jobs, but it cost American consumers around $800,000 a year per job created. That’s simply a loss of financial resources that could have been deployed elsewhere.

What do you make of the arguments that consumption should take second place to something else, such as national cohesion or pride or security?

First we should simply note the facts.

The first thing to know is that the United States today is the world’s second largest manufacturing nation. So, we are still a large manufacturing nation; we just don’t need a lot of workers because our workers are very productive, probably the most productive in the world.

The second is that American manufacturing is very dependent on trade. All manufacturers are consumers at some level, but that’s especially true for more advanced manufacturers like we have in the United States. They need access to cheap raw materials and parts. If you jack up the price of steel and throw a bunch of tariffs on auto parts, you end up lowering production in these more advanced industries. Steel was a case study of this. We imposed a bunch of tariffs on steel during the first Trump administration, and studies have shown that we saw a modest increase in steel output and employment, but overall manufacturing output and employment fell. According to the United States International Trade Commission, we had about a $500 million yearly net loss in manufacturing output because of the steel tariffs.

I should note one of my favorite stats: about half of everything imported into the United States today is a manufacturing input. It’s stuff that our manufacturers use to make other stuff. A lot of that also comes from their own companies abroad. So, Airbus has a facility in South Carolina that imports from Airbus France. BMW, also in South Carolina, imports from BMW in Germany. If you shut down their ability to access their parts and equipment abroad, you’re going to reduce their output in the United States. If you care about national defense, kneecapping BMW, Airbus, and Boeing is a bad thing.

Our manufacturers also need access to overseas markets and overseas consumers. About 95 percent of the world’s consumers live outside the United States. And so, if you deny American companies the ability to access those markets or make them globally uncompetitive by raising their input costs, then you’re harming the manufacturing sector.

So if you remember those things, as well as access to foreign capital, you realize that openness and production are not exclusive; they’re complementary. The former boosts the latter.

I also think there is a misunderstanding here about national security and trade. The criticism is that if we don’t have steel mills in the United States, we will depend on Chinese steel to build our aircraft carriers and tanks. But that’s not really how it works.

Right. We do import a good amount of steel, but the top steel suppliers to the United States are countries like Canada, Europe, and Japan. Countries like Russia and China are not in the top 10. And when you talk about a country like China with a billion and a half people and a massive manufacturing footprint, it makes sense for us to pool our resources with our allies and enter into trade and defense agreements. That allows us to work together boost the overall productive capacity of our defense industrial base. The US Defense industrial base includes Canada right now. That’s how close of an ally Canada is. So slapping tariffs on stuff from Canada just doesn’t make much sense, and it’s even more baffling that they’re doing it on national security grounds.

This is a good place for you to tell us about what’s been happening since Donald Trump took over the presidency. Where are we currently?

It’s been a busy few weeks. Shortly after President Trump’s inauguration, he issued several executive orders invoking a national emergency with respect to fentanyl coming from China, Mexico, and Canada. By invoking that national emergency, he unlocked tariff or trade powers under the International Emergency Economic Powers Act. It’s a cautionary tale about congressional delegations of power, but that’s an issue for another podcast. The President has since then imposed 20 percent tariffs on all Chinese goods. And those are on top of the 25 percent tariffs from his first term on half of Chinese goods and 25 percent tariffs on imports from Canada and Mexico.

He has also jacked up tariff rates from 10 percent to 25 percent for aluminum, and he kept the 25 percent steel tariffs, but he closed all of the exemptions that had been there before.

This is a huge change because around half of all steel and aluminum imports were exempt from the national security tariffs that Trump imposed the first time around. There were a series of agreements with companies going to the administration and saying, “We can’t get the steel and aluminum we need here,” and getting an exclusion. Trump has now shut all of those down. Not great for our manufacturing sector.

The President has also promised reciprocal tariffs. So, if India has a 20 percent tariff on American motorcycles, we’re going to put a 20 percent tariff on Indian motorcycles.

Markets are not thrilled. Not only with the tariffs but also the uncertainty. Economic policy is not supposed to enacted via a switch in the Oval Office. The President is turning on tariffs and then turning them off, sometimes in the same day. As any investor or lawyer will tell you, the thing that companies hate more than taxes is uncertainty. Without that predictability and consistency in the market, they can’t hire or invest. They freeze up and sit on their hands. That’s probably a bigger immediate problem than the tariffs themselves.

The other thing they’re going to do is stockpile. Right now, people in the construction industry are filling warehouses with construction materials because they’re worried about tariffs on Canadian lumber and steel. Having a warehouse full of stuff is a huge cost. You have to rent the warehouse and buy all the stuff, and that’s capital that you can’t deploy by hiring more workers or boosting output. Instead of focusing on their business, people are focusing on these emergency game plan scenarios.

And by the way, they’re all also lobbying in Washington. Trade policy lobbying has skyrocketed. Trade lawyers are making fortunes. They’re building beach houses in Delaware, all because of this tariff uncertainty. That’s good for them but bad for the economy. And it contradicts so much of the rhetoric coming out of this administration about eliminating inefficiency and waste and reducing the government’s role in the economy. It seems they’ve forgotten all of that on the trade front, and they’re doing basically the opposite. That will counteract the good parts of their economic agenda.

But what about fairness, Scott Lincicome? Is it fair that the Indians are placing a 20 percent tariff on us, and we are only placing 5 percent?

I have to tell you, when I heard about the reciprocal tariff, my lizard brain said to me, “Absolutely yes. Let’s make it fair.” What’s wrong with that argument?

A lot of the global trading system is based on this notion of reciprocity, but there are a few problems.

The first is the economics: matching other countries’ tariffs will make Americans poorer. Going back to the example of food, Mexico imposes certain tariffs on food, and we get a lot of food from Mexico. Does it make economic sense to impoverish our citizens in the way that Mexico impoverishes theirs? No, it doesn’t. So that’s the first issue.

There’s also a collectivist logic to this, that the government should punish some citizens to benefit others. But most of us don’t work in an export industry. We won’t benefit personally from any sort of expanded access to a foreign market. A few businesses might, but the vast majority of individuals won’t see any gains.

The other issue is America First. If you match other countries’ tariffs, you’re effectively letting them set your trade policy. I’ll give you examples because this can get very absurd. We buy a lot of coffee from Colombia. We do not grow coffee, except for a little bit in Hawaii. Well, Colombia has a 10 percent tariff on coffee beans from America, and we don’t send them any coffee beans. Should we let the Colombian government dictate our tariff policy in applying a 10 percent tariff on Colombian coffee? That’s not America First; it’s America Second. We should set tariffs and any other policy based on what’s good for America and what’s good for us as individuals, not what another country does.

Finally, practically speaking, this is a mess. You’re talking about thousands and thousands of different products from 200 different countries. You’re talking about trying to quantify not just tariff barriers but non-tariff barriers, subsidies, value-added taxes, you name it. Trying to administer this system would be incredibly difficult and would require thousands of new customs officials and tons of new paperwork, going back to how the administration is contradicting itself.

China is looming very large in this conversation. There is a lot of talk about the millions of jobs lost in the United States because of China. But my understanding is that most manufacturing jobs have been lost to automation.

First of all, is it true? And if so, should we be against automation? Tucker Carlson famously said he would be against autonomous vehicles if they took jobs away from truck drivers.

It is true that increased trade with China, starting around 1999, caused around a million manufacturing jobs to be lost. But there are two big caveats. First, those studies only looked at the jobs lost, not the jobs gained from lower input prices in manufacturing, jobs gained in services, and jobs gained from exports to China. When you include those figures, the overall net effect is a wash.

The second point is that those million manufacturing jobs were just a fraction of the total manufacturing jobs lost over the last several decades. Most of the manufacturing job loss over the last several decades was due to improving productivity. Not just robots, but computers, improved business practices, that kind of stuff.

And look, losing a job is painful, but it is an essential part of economic progress. The reason wages improve over time is productivity growth. In general, we want those robots. We want to outsource manual labor, unsafe labor, and the rest to machines because that allows us to make more stuff and have higher wages.

You can go back to telephone operators in the 1920s. That was a huge labor market shock, particularly for young women. But we would be worse off if we still had to pick up a rotary dial phone and have some woman connecting us like you see in the old movies. She’d have a job, but we would be worse off as a society. It is better to let that disruption happen and make it easy for people to adjust and move into other industries. We have all of these different policies in place—labor policy, occupational licensing, housing policy, regulatory policy—that make it harder for American workers hit by disruption to move on. That’s what we need to be focusing on.

I want to bring up one last subject. There’s a lot of discussion about Donald Trump playing some sort of four-dimensional chess. One of the arguments I’m hearing is that the tariff system is part of a concerted effort to reduce government spending and transition away from income taxes to a more consumption-oriented model. What do you think of that?

I’m extremely skeptical. One reason is the administration’s words and actions. There really isn’t a concerted effort in Washington right now to cut spending in the long term. The nips and cuts that DOGE is making are not going to make a dent in our spending trajectory. Mainly it’s Social Security and Medicare that need reform, and those are not being touched.

The second issue is the math. Tariffs aren’t a broad-based consumption tax; they are attacks on a narrow band of our consumption. Imports make up about $4 trillion out of $25 trillion in total consumption. And if you raise tariffs too high, you don’t get any imports, and you don’t get any revenue. So, there’s only so much revenue you can get from tariffs. You’re looking at maybe $400 billion a year maybe, and that’s generous. Others have said maybe $200 billion. Any more than that and imports will start shrinking. You would need to replace $2.5 trillion a year to eliminate the income tax.

The other big issue is that tariffs tend to cause the dollar to appreciate, which will make it harder for our exporters.

I just don’t see a lot of grand strategy here. And that leaves aside all the gossipy stuff we read in Politico. If we apply Occam’s Razor, the simplest answer is that President Trump likes tariffs. He likes using them as negotiating tools. He likes how it makes CEOs and government officials run to him seeking favor. He likes that they’re raising some revenue and that he can use them to push foreign governments around. That’s a far more likely explanation than some deep grand strategy.