By Paul Krugman / The New York Times
Do tariffs — taxes on imports — raise prices for U.S. consumers? There’s really no debate on the subject.
I don’t mean that everyone agrees. Rather, there are two distinct groups that aren’t talking to each other, each of which is more or less unified in its views. Almost all economists agree that taxes on imports are, in fact, passed on to consumers. Why? Because that’s what the evidence says, and it’s very hard to come up with an alternative story.
On the other hand, Trump loyalists — which these days means almost the entire Republican Party — insist as a group that foreigners, not American consumers, pay taxes on imports. Why? Because Donald Trump says so. And they don’t even try to engage with economists who disagree.
As I see it, the latter position is the more interesting of the two, not because it has a shred of validity — it doesn’t — but precisely because it doesn’t. How did we get to a state in which a whole political party supports a claim that experts unanimously reject? As I see it, the best way to understand what’s going on is to look at other countries’ histories; specifically the strange history of Lysenkoism in Josef Stalin’s Russia.
Just for the record, the case for the orthodox economists’ view is basically that taxes on imports are like taxes on anything else. If we were to require that car dealers — an extremely Republican group — pay a tax equal to 20 percent of the price of every car they sold, they would be the first to insist that this tax would lead to higher prices for their customers. Why would anyone imagine that a tax on goods sold by foreigners would have a different effect?
And studies of the effects of past tariffs say exactly what you’d expect: They’re passed on to consumers.
Still, a clearly false assertion that foreigners pay tariffs wouldn’t be the first zombie idea to eat the brains of some of the same people who insist that climate change is a hoax and that tax cuts for the rich pay for themselves. Why is this falsehood any different?
The answer, as I see it, is that it’s easy to understand why zombie ideas like climate change denial and tax-cut mysticism persist: They serve wealthy interest groups. Fossil fuel companies keep climate skepticism shambling along because any attempt to reduce greenhouse gas emissions would hurt their profits. Billionaires support think tanks and politicians who claim that great things will happen if we cut the taxes that billionaires pay.
As Upton Sinclair said, “It is difficult to get a man to understand something when his salary depends on his not understanding it.”
It’s hard, however, to identify any significant constituency for Trump’s tariff ideas among this group other than Trump himself. Yes, some industries would like protection from foreign competitors. But corporate America in general hates the idea of the across-the-board tariffs Trump favors and the global trade war they would unleash. As far as I can tell, business interests hope (probably wrongly) that he won’t actually go through with them.
But Trump himself has a thing about tariffs; and his party has dutifully fallen in line behind him.
So what does this have to do with Lysenko? And who was he, anyway?
Trofim Lysenko was a Soviet agronomist who in 1927 ran some poorly designed experiments involving peas that he claimed refuted Mendelian theory; the idea that the traits an organism passes down to future generations derive from its genes, not the organism’s experiences. (There’s a slight complication involving epigenetics, but it’s not relevant to the story.) He argued that Mendelian genetics was somehow inconsistent with Marxism, although even if you take Marxism seriously (I don’t) that argument doesn’t make sense.
What mattered was that Lysenko and his ideas somehow caught Stalin’s attention, and the dictator liked them. Never mind the fact that serious biologists, of whom the Soviet Union had several, considered Lysenko a crank; Stalin distrusted experts of any kind, while he approved of Lysenko’s peasant background.
And in Russia, disagreeing with Stalin on any issue was extremely dangerous. So Lysenkoist theory came to dominate Soviet biology for decades, despite leading to multiple agricultural disasters. Dissenters were condemned as Western agents, and in some cases died in prison camps.
The parallels with the Trumpist rejection of the economic consensus on the effects of tariffs should be obvious. I’m not sure who counts as Trump’s Lysenko — maybe Peter Navarro? — but in any case the claim that we can raise trillions from tariffs at no cost to American consumers has become central to Trump’s economic ideas; in fact, these days, tariffs seem to be Trump’s answer to nearly every problem.
Republican politicians, who normally inveigh against the evils of taxes, have fallen in line behind Trump’s plans to tax imports because in today’s GOP, you don’t disagree with Trump. Doing so won’t get you sent to prison camp, but it will very likely destroy your political career.
And the demonization of anyone who disagrees is already in full swing. “The notion that tariffs are a tax on U.S. consumers is a lie pushed by outsourcers and the Chinese Communist Party,” declared a spokesperson for the Republican National Committee.
The prospect of the United States imposing high tariffs, driving up inflation and fracturing the rules-based international economic order America helped build is serious. But the broader story — a major political party devoted to the principle that the leader is always right, never mind the evidence — is even more serious. It won’t stop with tariffs. You can all too easily imagine the widespread adoption of disastrous policies on other fronts.
This article originally appeared in The New York Times, c.2024.
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