Ludwig Von Mises was quite the economist, championing the Austrian school of economics for much of his life. Even after his death his legacy continues on in the form of the Mises Institute. He worked towards settling the debate over socialism and whether that was a good idea. Which leads to today’s vindication of the man. See in his 1979 book Economic Policy: Thoughts for Today and Tomorrow he wrote about interventionism and the government’s war against consumers. Specifically “[t]he government wants to interfere in order to force businessmen to conduct their affairs in a different way than they would have chosen if they had obeyed only the consumers. Thus, all the measures of interventionism by the government are directed toward restricting the supremacy of consumers. The government wants to arrogate to itself the power, or at least a part of the power, which, in the free market economy, is in the hands of the consumers.” Thus by intervening and controlling suppliers they are telling the consumers that their demands are improper. Consumers then fight back by trying to reach either old or close levels of consumption of that particular good or service. Following this logic, the government intervenes again in order to reign in the renewed powerful consumers. It doesn’t have to be this way though.
Yet today’s politicians think it does, with President Trump firing back at China for how it manages its currency. For the record it is not only China that Trump is upset at, but any country who devalues its currency. Quite possibly the biggest source of ammunition for Trump to fire is his ability to withhold government funds from businesses looking to invest in such a country. This is alongside calling China, and possibly others as time goes by, a currency manipulator, forcing China’s hand in retaliation. All this only going to hurt consumers in the long run.
Where Mises fits in the motivation for intervening. See Trump is not only upset that China is manipulating its currency, but also that US consumers are buying their products over US made ones. Mises would say it is not a trade war between countries that is brewing, but the continuation of the war between consumers who are driven by incentives to maximize marginal benefits and a government with a completely different agenda. In this example US consumers are too powerful in demanding Chinese made goods, businessmen import them to fill demand, and so the government is intervening to force market transactions to occur under a new set of rules. It easily could be consumers are buying directly from Chinese manufacturers without need of the US business. No one needs a war between groups on the same side. Mises surely was a man ahead of his time with his ideas transcending time.
-The Jiffy Riddler.