A couple of weeks ago, I was in Iowa, speaking with some farmers. They were by and large very positive about the Trump administration, but they were concerned — and genuinely baffled — by the administration’s stance toward NAFTA, and toward free trade in general. These were corn farmers, and they are very excited by the possibility that Mexico may soon make a move toward expanding the use of ethanol in Mexican gasoline. They envision a pipeline, not one that brings ethanol from Iowa to Mexico but one that brings great shunting gurgling flows of money from Mexico to Iowa ethanol producers. “Don’t they know how much business we already do in Mexico?” they ask. “Why would they mess that up?” You can have the same conversation with executives at Apple or Ford worried that Washington is going to throw a big stupid wrench into their global supply chains. Nobody in Washington understands what it takes to make an iPhone or a pound of upland cotton, but they do know how to get in the way, how to hold up one hand and say “No!” while holding out the other hand and saying “Pay!”
There are a few necessary conditions for prosperity: peace, property rights, stable and reasonably accountable government, good courts, effective education, etc. Those are necessary but not sufficient. The secret sauce is neglect — benign neglect, the willingness to trust people and let them alone to see what they can do, to let them try new things and fail nine times out of ten, even if trusting people means letting them reach across a border or two and cooperate with the nefarious Canadians or the Indians or the Chinese or the Mexicans.