Donald Trump claims to be very successful at business, observes Don Boudreaux in this guest post, and so too does John Key, but this would make neither an expert on the economy. Wealth doesn't indicate economic wisdom.
Here’s a refrain that I’m being bombarded with by e-mail and on Facebook; this particular version is a Facebook comment by someone named Thomas Marise (whom I don’t know):
Such a claim is illogical, even if we assume — falsely — that Trump earned every cent of his monetary fortune honestly, rather that at least some of it through government-orchestrated theft.
Knowing how to run a business is not the same thing as knowing economics. To assume that the two domains of knowledge and expertise are the same is an error equivalent to assuming that a successful NASCAR driver is thereby an expert automotive engineer. Of course, it’s possible for a successful NASCAR driver to know something about automotive engineering, just as it’s possible for a successful business person to know something about economics.
But success at each of the former tasks (driving a race car and managing a business) is not the same thing as, and requires very little familiarity with, the latter domains of knowledge (automotive engineering and economics).
Strong evidence — indeed, virtual proof — that knowing how to run a business successfully does not imply knowledge of economics is supplied by the great economics-policy differences that separate successful business people. Charles Koch, for example, is a far more successful business person than is Donald Trump, yet Mr. Koch’s understanding of economics differs markedly from Mr. Trump’s. If success at business were a sufficient indicator of deep and expert knowledge of economics, it would be nearly impossible to explain the deep differences that separate Mr. Koch’s professed understanding of economics from Mr. Trump’s.
More generally, genuinely successful business people differ wildly amongst themselves in their expressions of economic understanding. Indeed, business people differ far more widely amongst themselves in their economic understanding than do economists (whose differences, while real, are nowhere near as great as they are often portrayed).
It follows that successful business person X’s claims about the economy cannot be presumed to reflect the knowledge, reflection, and understanding of someone who genuinely knows economics.
Donald Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, a professor of economics and former economics-department chair at George Mason University and, a former FEE president.
This post appeared at the Foundation for Economic Education website, cross-posted from Cafe Hayek.