Michael Chapman
Politicians who support tariffs and other forms of government intervention in the economy frequently emphasize reshoring, trade deficits, cheap imports, and national security, but they rarely talk about consumers. That’s no accident. In a market economy, it is consumers, through their choices, who determine what goods and services are produced and at what price. They—not federal planners—are the true engine of capitalism and freedom.
As Cato Adjunct Scholar Donald J. Boudreaux and former Senator Phil Gramm explain in their new book, The Triumph of Economic Freedom: Debunking the Seven Great Myths of American Capitalism,
“In a market-driven system, consumers decide what is produced, how it is produced, and which jobs are created; however, those who are calling to shift the focus from consumption to jobs are really proposing that we allow them to tell society which jobs are created, where labor is employed, and how capital is invested. The proposal to focus the economy on ‘good jobs’ and not the free decisions of those who earned the income in the first place is industrial policy under which self-appointed guardians, using subsidies and tariffs, tell the plebs what is best for them to produce and consume. This debate is as old as man. The idea of allowing the ‘best and brightest’ to choose has been tried and rejected for eons. Letting those who earn their income by the sweat of their brow decide how they spend their income is a new and revolutionary idea.”
The Trump administration’s tariff agenda is textbook industrial policy. The “self-appointed guardians”—Trump, Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent—call the shots. They use tariffs, subsidies, and similar tools to steer the economy toward politically favored jobs and sectors, sidelining the preferences of consumers.
That’s why consumers are rarely discussed: their preferences don’t matter to those who believe they know best. For example, Trump said that a young girl doesn’t need 30 dolls—“I think they can have three dolls or four dolls because what we we’re doing with China was just unbelievable.” The message is clear—Trump decides, not the consumer. (Keep in mind that consumers are not just random strangers at a Black Friday sale; they are our neighbors, parents, co-workers, business owners (producers), farmers, clerks—regular Americans going about their daily business.)
There’s also a more pragmatic reason tariff advocates avoid the consumer: tariffs are taxes. Businesses pass higher import costs on to buyers, and subsidies are funded by tax dollars. While claiming to help American workers, the government actually raises their living costs (tariffs) and takes their income (taxes). Better to talk about jobs than admit tariffs cost consumers.
This constant tinkering in the economy is not new. Ludwig von Mises described it as a “mixed economy,” where authorities “endeavor to restrain, to regulate, and to ‘improve’ capitalism by government interference.” Ayn Rand called it “a mixture of freedom and controls,” resulting in “rule by pressure groups.” Think of green energy lobbyists vs. oil interests—it’s the same dynamic today.
In his April 2 “Liberation Day” speech, Trump praised the Teamsters and auto workers—powerful lobbies—but ignored consumers. Trump also implied his actions would improve capitalism. “These tariffs are going to give us growth like you haven’t seen before, and it’ll be something very special to watch,” he said. “We’re going to become an industrial powerhouse.”
Trump mentioned tariffs 35 times in that speech. Consumers? Once. In his GOP convention speech last summer, Trump mentioned tariffs twice but did not talk about the American consumer. In a presidential proclamation for World Trade Week this year, Trump did not mention US consumers. In his April 29 executive order on tariffs, Trump talked about protecting “national security” but said nothing about consumers. In his proclamation for National Small Business Week, Trump spoke of “targeted tariffs” but said nothing of consumers and the key role they play in the economy.
Vice President JD Vance echoes his boss. For instance, in his March 2025 speech at the American Dynamism Summit, Vance mentioned consumers once (in relation to inflation) and tariffs three times, repeating the usual protectionist slogans—“deindustrialization,” “globalization,” “offshoring,” and the “great American industrial comeback.”
Such rhetoric also dominates the messaging of Oren Cass, economist and founder of the protectionist think tank American Compass. Cass frequently criticizes trade deficits, cheap imports, and “blind faith in free markets.” He also notes that his organization’s ideas, which were “initially mocked and condemned as ‘progressive’ and ‘socialist,’ have become not only acceptable but also, in many cases, the accepted position.”
That is true. Those ideas are in vogue, and they are progressive and socialist. Their advocates are among the “self-appointed guardians” who like “to tell the plebs what is best for them to produce and consume,” as Boudreaux and Gramm explained.
Mises warned against this in Planned Chaos: “In the market economy the consumers are supreme. Their buying and their abstention from buying ultimately determine what the entrepreneurs produce and in what quantity and quality. … It is consumers who make poor people rich and rich people poor. It is the consumers who fix the wages of a movie star and an opera singer at a higher level than those of a welder or an accountant.”
So “who is Professor X”—Trump, Vance, Lutnick, Cass—“to arrogate to himself the privilege of overthrowing their decision?” Mises continued. “What the interventionist aims at is the substitution of police pressure for the choice of the consumers. All this talk: the state should do this or that, ultimately means the police should force consumers to behave otherwise than they would behave spontaneously. In such proposals as: let us raise farm prices, let us raise wage rates, let us lower profits, let us curtail the salaries of executives, the us ultimately refers to the police. Yet the authors of these projects protest that they are planning for freedom and industrial democracy.” Or, as the Trump administration calls it, “Liberation Day,” the “day American industry was reborn”—“Make America Great Again.”
But these self-appointed guardians cannot make America great again because they are deciding what to manipulate. They think they are smarter than millions of consumers acting in the global marketplace. They’re not, and the result is Trump’s constant tariff flip-flops and the subsequent chaos.
Only American consumers, free of government interference, can make this country great. As Mises taught, “Some agency must determine what should be produced. If it is not the consumers by means of demand and supply on the market, it must be the government by compulsion.”