In an Ideal America

 

Every person should be free

• to pursue his ambition to the full extent of his abilities, regardless of race or creed or family background.


• to associate with whom he pleases for any reason he pleases, even if someone else thinks it's a stupid reason.


• to worship God in his own way, even if it isn't "orthodox."


• to choose his own trade and to apply for any job he wants — and to quit his job if he doesn't like it or if he gets a better offer.


• to go into business for himself, be his own boss, and set his own hours of work — even if it's only three hours a week.


• to use his honestly acquired property or savings in his own way — spend it foolishly, invest it wisely, or even give it away.


• to offer his services or products for sale on his own terms, even if he loses money on the deal.


• to buy or not to buy any service or product offered for sale, even if the refusal displeases the seller.


• to disagree with any other person, even when the majority is on the side of the other person.


• to study and learn whatever strikes his fancy, as long as it seems to him worth the cost and effort of studying and learning it.


• to do as he pleases in general, as long as he doesn't infringe the equal right and opportunity of every other person to do as he pleases.

The above, in a nutshell, is the way of life that the libertarian philosophy commends.

It is the way of individual liberty, of the free market, of private property, of government limited to securing these rights equally for all.

Leonard E. Read

Publisher

The Freeman

November 1954

Living Within Our Means

The following 30 minute video depicts Milton Friedman at his best.  This interview allows Milton to discuss several of his most important topics.  One of his famous quotations is near the beginning of this video “One of the great mistakes is to judge policies and programs by their intentions rather than their results”.  His ability to present uncomplicated answers to complex questions is superb.  This video is now listed in the permanent links on this blog to the right of this text under “View these videos”.

This video is from the PBS show "The Open Mind", Moderator/Host Richard D. Heffner, Guest: Milton Friedman, economist, Sunday, December 7, 1975:

http://www.thirteen.org/openmind/public-affairs/living-within-our-means/494/

You should invest 30 minutes of your time to watch this video in its entirety, if for no other reason to see how fluidly Milton is able to think through these questions and give such easily understood answers.

If you do not have the time now here are some of the highlights:

One of the great mistakes is to judge policies and programs by their intentions rather than their results. We all know a famous road that is paved with good intentions. The people who go around talking about their soft heart, I admire them for the softness of their heart, but unfortunately, it very often extends to their head as well, because the fact is that the programs that are labeled as being for the poor, for the needy, almost always have effects exactly the opposite of those which their well-intentioned sponsors intend them to have.

Let me give you a very simple example. Take the minimum wage law. Its well-meaning sponsors — there are always in these cases two groups of sponsors. There are the well-meaning sponsors and there are the special interests who are using the well-meaning sponsors as front men. You almost always when you have bad programs have an unholy coalition of the do-gooders on the one hand and the special interests on the other. The minimum wage law is as clear a case as you could want. The special interests are, of course, the trade unions, the monopolistic craft trade unions in particular.

You see, I think there’s been one underlying basic fallacy in this whole set of Social Security and Welfare measures. And that is the fallacy — this is at the bottom of it — the fallacy that it is feasible and possible to do good with other people’s money. Now, you see that fallacy — that view — has two flaws. If I want to do good with other people’s money I’d first have to take it away from them. That means that the welfare state philosophy of doing good with other people’s money, at its very bottom, is a philosophy of violence and coercion. It’s against freedom, because I have to use force to get the money. In the second place, very few people spend other people’s money as carefully as they spend their own.

But if you take the road that we have been on, we are heading towards a destruction of our free society and towards a totalitarian society.... we still have time to avoid it. But we will not avoid it unless the people of this country recognize the danger and take very difficult and important steps to set a limit on the extent to which they are going to permit government to interfere with their lives.

Well, I say thank God for government waste. If government is doing bad things, it’s only the waste that prevents the harm from being greater. And the waste of government has two very important elements. Number one, if government were now spending.…efficiently, we’d be slaves now. And in the second place, the waste is so obvious that it arouses a counter­movement on the population at large, people are disillusioned with government and it increases the chance that they will recognize where this road is taking them and get off that train before it goes all the way.

Other People's Money

These 2 short videos explain the fundamental inefficiency of government spending:

The first video is an excerpt from a TV interview on PBS "The Open Mind" (December 7, 1975).  In this interview Nobel Laureate economist Milton Friedman examines the dynamics of "doing good" with other people's money:

http://youtu.be/2IECY6LgqE0

The second video is from the organization ProLiberty:

http://youtu.be/leYMlFWWrmw

Top Three Common Myths of Capitalism

The following 3 minute and 38 second video from LearnLiberty.org debunks three myths about capitalism:

• Is being pro-business and pro-capitalism the same?
• Does capitalism generate an unfair distribution of income?
• Was capitalism responsible for the most recent financial crisis?

Dr. Jeffrey Miron at Harvard answers these questions by exposing three common myths of capitalism.

http://youtu.be/KGPa5Ob-5Ps

F. A. Hayek

May 8, 2013 marks the 114th anniversary of the birth of F. A. Hayek.  Please take some time today to study his life’s work and his message.  A good place to start is at Libertarianism.org and this link to F. A. Hayek’s biography:

http://www.libertarianism.org/people/f-a-hayek

These are some of the highlights:

F. A. Hayek, the 1974 Nobel Memorial Prize winner in Economic Sciences, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought.

Socialism appealed to the idealism of intellectuals, yet it brought the most hideous tyrannies. Just from the standpoint of human liberty, socialism was a catastrophe everywhere.

More than anyone else, Nobel Laureate Friedrich Hayek showed why socialism undermines human liberty and, if pursued far enough, must result in tyranny. He told why thugs dominate so many socialist regimes. He explained how institutions of a free society develop without central planning.

In 1936, Hayek gave a talk, “Economics and Knowledge,” at the London Economic Club, and Economica reprinted it. He explained that prosperity depends on tapping vast amounts of information about what people want and how best to supply it. The information is dispersed among millions of people and constantly changing, which dooms central planning to failure.

He noted there is general agreement about a few functions of government such as providing national defense and punishing violent criminals, but as government expands beyond the realm of general agreement, it must enforce conformity. Central economic planning, Hayek explained, means more and more coercion as officials gain power to decide what work people must do, which kinds of cars, pens, apples and everything else must be produced—and who should get them. He observed that power attracts those who don’t have scruples about imprisoning or even executing people. That’s why “the worst get on top.”

Hayek’s book titled The Road to Serfdom—after Alexis de Tocqueville’s phrase “the road to servitude”— was published in England on March 10, 1944.  The University of Chicago Law Review (Spring 1949) published Hayek’s essay “The Intellectuals and Socialism.” He wrote, “The main lesson which the true liberal must learn from the success of the socialists,” he wrote, “is that it was their courage to be Utopian which gained them the support of the intellectuals and therefore an influence on public opinion which is daily making possible what only recently seemed utterly remote.”

Hayek’s writings inspired Ronald Reagan in the United States and Margaret Thatcher in Great Britain. Hayek was revered by people who suffered from socialist tyranny in Eastern Europe, the Soviet Union and China. Hayek’s last work was The Fatal Conceit, the Errors of Socialism (1988).

Hayek had lived just long enough to see the Union of Soviet Socialist Republics disappear from the map. He had insisted, as Ludwig von Mises did before him, that socialism would impoverish multitudes—and he was vindicated. He correctly warned that socialism ultimately means oppression, slavery and mass murder. He did perhaps more than anyone else to show that free people, not government planners, are the key to a flourishing civilization.

As John Cassidy wrote in the February 7, 2000 New Yorker, “If there are two things most people can agree on these days, they are that free-market capitalism is the only practical way to organize a modern society and that the key to economic growth is ‘knowledge.’ So prevalent are these beliefs that their origins are rarely examined, which is somewhat surprising, since both statements can be traced back, in large part, to one man, Friedrich August von Hayek.” His moral courage and dazzling insights made clear that ideas shape our destiny.

The following article appears in the 4/19/13 edition of "The Freeman" a newsletter from the Foundation for Economic Education (FEE)

Special Laws for Special Friends

APRIL 29, 2013 by LAWRENCE W. REED

One of the pillars of the time-honored “fair field and no favor” view of government was equal treatment of all citizens. If a public legislative body passes a law, it shouldn't carve out exceptions without extraordinary, compelling reasons. Nor should it write a law intended, without saying so, to benefit one person or company at the expense of everyone else.

Sound reasonable? If so, you may have a problem with this paragraph from an Associated Press story printed in The Wall Street Journal on March 25:
“As reports circulated that ‘Late Night’ host Jimmy Fallon is poised to take over for Jay Leno, New York Governor Andrew Cuomo proposed a bill that would give a 30% [tax] credit to any ‘relocated television production’ that films before a large studio audience, has a $30 million budget and has been on the air for at least five seasons.”

Why doesn't Cuomo just spit it out? He had one and only one company in mind here—Comcast, which owns NBC. Cuomo wants Comcast to move Leno’s “Tonight” show from California to New York City.
Politicians pick winners and losers (mostly losers), carve out special breaks and privileges, and treat this group or that firm differently than they treat others with less clout and fewer connections. It happens all the time, and often in the name of “economic development.” (If this bothers you, then maybe, like me, you’re a Locofoco at heart).

In a country known for having forged the world’s highest living standard from what was wilderness scarcely 200 years ago, one would think that “economic development” is a well-understood concept. Unfortunately, it isn't.

In recent decades, economic development has come to mean something other than the spontaneous, entrepreneurial phenomenon that built America. It is often thought of as a kind of activist, public-policy responsibility of state and local governments. Giving a special tax break to one particular firm because somebody in government thinks it’s a “good idea” is bad enough; worse yet is the growing business of doling out taxpayer cash and other forms of subsidy to specific companies and groups.

Many politicians find this approach attractive because it brings with it the pageantry of ribbon-cuttings and photo opportunities. They love to say, “Look at the jobs I created.”

But if politicians and the people they appoint claim to be good at picking winners and losers with other people’s money in the public sector, shouldn’t they have proven it first by earning trillions with their own money in the private sector? And even if they did, is there anything about the political environment that would give us reasonable hope they could duplicate that success when it’s not their own money they’re playing with?

Even when it doesn’t degenerate into a thinly disguised system of cronyism, government placing its judgment ahead of the verdicts of the marketplace is more than just a role of dubious value. It is, indeed, utterly preposterous. As Milton Friedman was fond of saying, “No one spends someone else’s money as carefully as he spends his own.” Political actors are the best and most reliable examples of this truism.
How about just getting a few basics right, like protecting the peace and punishing wrongdoers, and stopping this business of creating special privileges aimed at a select few? Is that too much to ask of government in a society that claims to be “free” and “democratic”?

At the very least, let’s stop referring to the toxic environment of special favors as “free enterprise.” It may be “enterprise,” but it isn’t “free” if it’s rigged.

The solution is to talk

The following 3 minute video is from a question and answer session with Milton Friedman at Cornell University in 1978:

Milton defines the problem as follows:

Everyone wants to cut down government provided that those things that he has in interest in are maintained.

His solution:

The solution is for people like you and me to talk, to ourselves and our fellows and to try to persuade our fellow men to be of like mind, to change the climate of opinion in these respects, to try to correct the political structure...