The Free Market

P. J. O'Rourke

Quoting P.J. O’Rourke:

The free market is simply a measurement. The free market tells us what people are willing to pay for a given thing at a given moment. That’s all the free market does. The free market is a bathroom scale. We may not like what we see when we step on the bathroom scale, but we can’t pass a law making ourselves weigh 165. Liberals and leftists think we can.

Reagan On The Free Market

Quoting President Ronald Reagan:

“We who live in free market societies believe that growth, prosperity and ultimately human fulfillment, are created from the bottom up, not the government down. Only when the human spirit is allowed to invent and create, only when individuals are given a personal stake in deciding economic policies and benefiting from their success — only then can societies remain economically alive, dynamic, progressive, and free. Trust the people. This is the one irrefutable lesson of the entire postwar period contradicting the notion that rigid government controls are essential to economic development.”

The New American Aristocracy

Angelo Codevilla

Angelo M. Codevilla has written a brilliant essay titled, “America’s Ruling Class – And the Perils of Revolution”. It exposes the development of a powerful American social class, made up of politicians from both national parties. They do not represent the voters who elected them, but instead represent a worldview which they believe must be imposed upon the citizens of our country. Codevilla writes:

Our ruling class’s agenda is power for itself. While it stakes its claim through intellectual-moral pretense, it holds power by one of the oldest and most prosaic of means: patronage and promises thereof. Like left-wing parties always and everywhere, it is a “machine,” that is, based on providing tangible rewards to its members. Such parties often provide rank-and-file activists with modest livelihoods and enhance mightily the upper levels’ wealth. Because this is so, whatever else such parties might accomplish, they must feed the machine by transferring money or jobs or privileges — civic as well as economic — to the party’s clients, directly or indirectly. This, incidentally, is close to Aristotle’s view of democracy. Hence our ruling class’s standard approach to any and all matters, its solution to any and all problems, is to increase the power of the government — meaning of those who run it, meaning themselves, to profit those who pay with political support for privileged jobs, contracts, etc. Hence more power for the ruling class has been our ruling class’s solution not just for economic downturns and social ills but also for hurricanes and tornadoes, global cooling and global warming. A priori, one might wonder whether enriching and empowering individuals of a certain kind can make Americans kinder and gentler, much less control the weather. But there can be no doubt that such power and money makes Americans ever more dependent on those who wield it. Let us now look at what this means in our time.

By taxing and parceling out more than a third of what Americans produce, through regulations that reach deep into American life, our ruling class is making itself the arbiter of wealth and poverty. While the economic value of anything depends on sellers and buyers agreeing on that value as civil equals in the absence of force, modern government is about nothing if not tampering with civil equality. By endowing some in society with power to force others to sell cheaper than they would, and forcing others yet to buy at higher prices — even to buy in the first place — modern government makes valuable some things that are not, and devalues others that are. Thus if you are not among the favored guests at the table where officials make detailed lists of who is to receive what at whose expense, you are on the menu. Eventually, pretending forcibly that valueless things have value dilutes the currency’s value for all.

Laws and regulations nowadays are longer than ever because length is needed to specify how people will be treated unequally. For example, the health care bill of 2010 takes more than 2,700 pages to make sure not just that some states will be treated differently from others because their senators offered key political support, but more importantly to codify bargains between the government and various parts of the health care industry, state governments, and large employers about who would receive what benefits (e.g., public employee unions and auto workers) and who would pass what indirect taxes onto the general public. The financial regulation bill of 2010, far from setting univocal rules for the entire financial industry in few words, spends some 3,000 pages (at this writing) tilting the field exquisitely toward some and away from others. Even more significantly, these and other products of Democratic and Republican administrations and Congresses empower countless boards and commissions arbitrarily to protect some persons and companies, while ruining others. Thus in 2008 the Republican administration first bailed out Bear Stearns, then let Lehman Brothers sink in the ensuing panic, but then rescued Goldman Sachs by infusing cash into its principal debtor, AIG. Then, its Democratic successor used similarly naked discretionary power (and money appropriated for another purpose) to give major stakes in the auto industry to labor unions that support it. Nowadays, the members of our ruling class admit that they do not read the laws. They don’t have to. Because modern laws are primarily grants of discretion, all anybody has to know about them is whom they empower.

By making economic rules dependent on discretion, our bipartisan ruling class teaches that prosperity is to be bought with the coin of political support.

Read this entire article. . . .

Free To Choose

John Stossel

Quoting columnist John Stossel:

“America’s current struggles notwithstanding, life here is pretty good. We have a standard of living that’s the envy of most of the world. Why did that happen? Prosperity isn’t the norm. Throughout history and throughout the world, poverty has been the norm. Most of the world still lives in dire poverty. Of the 6 billion people on earth, perhaps 1 billion have something close to our standard of living. Why did America prosper when most of the people of the world are still poor? Milton Friedman taught me the answer. More than any other American, Friedman, who won the Nobel Prize in economics in 1976, clearly warned the world about the unintended consequences of big government. ‘We’ve become increasingly dependent on government,’ said Friedman. ‘We’ve surrendered power to government; nobody has taken it from us. It’s our doing. The results — monumental government spending, much of it wasted, little of it going to the people whom we would like to see helped.’ That’s from Friedman’s PBS TV series ‘Free to Choose,’ which aired 30 years ago and became the basis of his No. 1 bestseller by the same name. The title says a lot. If we are free to make our own choices, we prosper.”

Read more here. . . .

Lifting The Burden Of The Less Intelligent

What do you think would be the result of gathering together America’s best and brightest intellectual elite to manage the nation’s economy and social engineering policies for the future? Advocates of central planning have a long record of supporting the idea that the intellectual few need the power to manage the lives of the common people who are less wise in making important decisions. The disastrous results of such policies – when enforced – are well documented in the history of the 20th century. Nevertheless, the supporters of central planning have not been deterred by the facts. Thomas Sowell, who is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust writes an excellent article concerning this phenomenon:

Many of the wonderful-sounding ideas that have been tried as government policies have failed disastrously. Because so few people bother to study history, often the same ideas and policies have been tried again, either in another country or in the same country at a later time– and with the same disastrous results.

One of the ideas that has proved to be almost impervious to evidence is the idea that wise and far-sighted people need to take control and plan economic and social policies so that there will be a rational and just order, rather than chaos resulting from things being allowed to take their own course. It sounds so logical and plausible that demanding hard evidence would seem almost like nit-picking.

In one form or another, this idea goes back at least as far as the French Revolution in the 18th century. As J.A. Schumpeter later wrote of that era, “general well-being ought to have been the consequence,” but “instead we find misery, shame and, at the end of it all, a stream of blood.”

Continue reading. . .