John Stossell on Friedman's Free To Choose

Here is a very good introduction of an excellent book, Friedmans' Free to Choose:

"The Options Destroyers"

"The Options Destroyers" by Thomas Sowell originally appeared as a newspaper article; it is narrated in this video:


This piece dovetails with what I recently read in Sowell's Intellectuals and Society, as well as a recent video post by the folks at Reason.

Top-down regulations, by their very nature, reduce the number of options for consumers in the market.  That's what they are designed to do: reduce the number of perceived bad options that otherwise free people might act upon.  (Soon we will no longer have the option--freedom, that is--to purchase incandescent light bulbs.)  Real life choices become fewer as a result of the near-sighted effects of reform crusaders and their vote-catching politician allies in legislatures.  What's a recent and real world example?  Oregon's state wide ban on payday loan interests rates above 36%, mentioned in a recent Freedom Lessons post.  Poor and options-strapped folks in Oregon now are even more options-strapped.

Worse still, excessive regulations introduce a third set of terms between consumers and the purveyors of goods and services.  When left free to cooperate and interact freely, consumers and businesses make mutually beneficial transactions.  That's mutual consent between two parties.  Intrusive and short-sighted regulations introduce a third party--the options destroyer--and force a third set of acceptable terms into the transaction, thus providing disincentives for economic activity.

Rent control is a good example.  Landlords are forced to satisfy both their tenants' demands and the demands of local governments.  With less profit to make there is less incentive to upkeep buildings, let alone provide new living quarters to the public.  An artificially high number of people want to rent due to an artificially low rent, and an artificially low number of apartments are available to rent.  Real shortages occur, existing buildings deteriorate, slums crop up, and commuters are forced to travel great distances past empty and boarded up buildings.

In a free market unhampered by well-intentioned busy-body do-gooders pushing intrusive interventionalist policies upon us, we self-interested people who know best about what is best for ourselves would find a way to get by just fine.

Just think about all the options we would enjoy!

If I Had To Recommend One Book...(Video)

Repeat, had to.  My one recommendation for anyone interested in freedom, and both its friendly and hostile forces, would be Henry Hazlitt's Economics in One Lesson.  Hazlitt's conversation masterpiece is oncise, grounded in fundamental economic principles, illuminated with historical examples, void of arcane economist-speak and pointy-headed graphs (Sorry, economists.  You know it's true.), and crisply written.

Line one, chapter one: "Economics is haunted by more fallacies than any other study known to man."

Here is a good introduction to the book, Hazlitt, and the enduring impact of this brief book, compliments of the Ludwig von Mises Institute:

Control Freaks

Does anyone enjoy being called a "control freak"?  Put another way, who does not shrink from thought of being one?  The mere hint of the accusation causes most socially sensitive people to tone down the I-know-better-than-you, paternalistic, patronizing attitude toward other adults that precludes their acting according to their own judgment.

Most would say, "Oh, I'm sorry about that.  Please, I beg your pardon for being a nosy nanny.  Go on about your business."

That is, of course, if you are a bureaucrat institutionally vested in the regulatory state, a vote-catching demagogue politician, or a preening intellectual desirous of imposing through the coercive power of the government your vision of reality onto the rest of us poor unenlightened proles.  In any of these circumstances deciding for individuals what one believes individuals are incapable of deciding for themselves is lauded as "progressive" and mindful of some nebulous notion of "social justice" and the common good.

The more government takes it upon itself---and we as a society ask it to take it upon itself---making decisions we individuals are best suited to make ourselves, the less free we become as a market economy, and society.  From price controls to excessive regulation to protective tariffs,  every choice that is removed from individuals acting freely and cooperatively interacting within a free market is a choice made on our behalf using coercion.

In a free society the consumer controls 100% of the market through free exchange; in a socialist state central planners control the market through the use of force.  One is voluntary and the antithesis of everything a control freak would abide; the other is arbitrary and made to order for a control freak holding the regulatory reigns of power.

From Thomas Sowell's Intellectuals and Society: 
"The fundamental difference between decision-makers in the market and decision-makers in government is that the former are subject to continuous and consequential feedback which can force them to adjust to what others prefer and are willing to pay for, while those who make decisions in the political arenas face no such inescapable feedback to fore them to adjust to the reality of other people's desires and preferences."

If only we could make those control freaks in government feel ashamed at being, well, control freaks over our otherwise free lives.

Who Said That?

 Who said this:

"The only way America succeeds is if businesses are succeeding.  The reason we've got a[n] unparalleled standard of living in the history of the world is because we've got a free market that is dynamic and entrepreneurial...That free market has to be nurtured and cultivated."

Speaker-elect John Boehner?  No.  Milton Friedman?  Nope.  Thomas Sowell?  Strike three.

President Obama said it.  The day after the the midterm election, in his televised news conference,  he said it.  And, much to my surprise and delight, he did not appear to throw up a little in his mouth right after the words, free market.  (Although, there was a significant pause there somewhere.  Could be a slight case of acid reflux...)

Begin at the 46 minute mark.  Comments follow the video:


Explanations for such a public statement from a president who gives every indication of a deep hostility to an unplanned free market can abound.  Let's entertain just three:

1. Timing.  It was said the day after the midterms.  The Tea Party influence on the results was significant, what, with all this talk and rally signage about socialism and free markets.  With all this talk of compromise and working together, it makes sense to pretend you've just read the dust cover to one of von Mises' tracts.  (It was Mises who said, "The people of the United States are more prosperous than the inhabitants of all other countries because their government embarked later than the government in other parts of the world upon the policy of obstructing business.") So It could just be prudent political posturing, or at least reflexive lip service.
2. Politics.  Surprise!  Related to #1, and probably interchangeable with it, he felt the calculating urge to drop a little homage to free marketeers on the Hill.  (All four were probably listening.)
3.  He actually believes it or at least acknowledges the historical fact that our prosperity and standard of living are the result of the level of freedom we've always enjoyed.   The progressive Left can indeed acknowledge so much and still embrace a radically different vision for the future of American society.  After all, who should be running the fate of the country, hordes of unorganized and uncoordinated free people pursuing their own self interests or the wiser-than-thous with Ivy League degrees?  That's a no-brainer, depending on who you're talking to, of course.

Actually, after considering all three possibilities I really don't care what the motivation for saying was.  Yes, forget all that conjecturing.

The important matter is that he said it.  Just as importantly is the fact that only the most strident outspoken socialists publicly denounce capitalism, individual freedom, and constitutional limitations on government that protect so much.  In America one still has to at least pay lip service to that whole freedom thing, and most times pay lip service to that whole Constitution thing, too.  As has been stressed here and will be stressed again and again, we have much reason for---dare I use the term---hope that politicians still feel the political urgency to give a public tip-of-the-hat to freedom.  This belies what their advisers and pollsters and focus groups tell them: "Americans are still hung up on being the freest people in the world.  Demagogue over it, prevaricate around it, bulldoze your way  over it, but you have to deal with it."

This is still the home field for freedom.  If we want to be the visiting team we can move to Europe and slug away there.

I wanted to discuss what follows these words, comments about the financial crises, health care, and BP but am running long.  Just remember to ask: How free is the market in health care, the financial markets, and petroleum?   But that's for another Chalk Talk.

Video: Economics In One Lesson

I'm working my way through Thomas Sowell's book, Intellectuals and Society.  Many of the points he articulates reminds me of the importance of acquainting and reacquainting ourselves with the first principles of freedom and freedom in the market.

Freedom makes sense; convoluted policies that suppress freedom do not make sense.  Society is broadly trained to accept bad policy.  Hence, we instinctively want to be free but reflexively reject free market capitalism.

Below is a very good video to explain why.  Here is a book to counter the trend: Economics In One Lesson

Voting With Your Feet

We would never tolerate paying $16 for a gallon of milk.  We would simply go elsewhere.  I'll take my wallet and use my feet to go elsewhere, thank you very little.

Way too many Americans have the opposite view of government and laws.  We tend to look past local and state governments and expect problems to get addressed inside the Beltway.   Besides local potholes and school taxes, no problem seems too small (local) for Congress.  This attitude reduces our opportunity to vote with our feet and wallet, leaving us with only one lonely ballot and a set of crossed fingers every two years.

We are simply less free when every political issue becomes federalized: we can no longer move elsewhere to escape the (over)reach of bad laws.  If, for example, enough people in Maine want single payer state-run health care, they can have it at the state level.  People can leave and people can move there.  Businesses will come and go.  An economic force is created, equal and opposite forces will react within the state of Maine.  But once the same titans of finance that brought us Social Security, Medicare, and the Post Office grasp control of health care, where can we move?

Likewise, federal bailouts of profligate state legislatures punish individuals who live in fiscally responsible states by confiscating their property and transferring said property to irresponsible states.  What's the point in living in Texas if you are going to be taxed twice, once for your own state budget and a second time for California's?  And what's the incentive for California legislatures to get things right?

The Tea Party certainly does it part to encourage Congress to step back into its constitutional role.  Expecting government to control itself from the inside, however, has its obvious limits, no matter how many Tea Party candidates breech the Beltway mote.  Like any good reform, change has to begin with the public opinion of us benighted proles.  This process begins by no longer expecting Congress to tackle every single issue, then encouraging fellow proles to see the light.  With enough public opinion and time, the holier-than-thous in D.C. will play along.

I hope you voted today.  You vote every day many times a day just by existing in a market economy.  If you enjoy the options that allow you such a high and affordable standard of living, expect similar options politically.  Our political standard of living really should not be any lower than economic one.