Free To Choose

“To Smith and Jefferson, government’s role was as an umpire, not a participant.”

The purpose of government, to economist Adam Smith and statesman Thomas Jefferson, is not to interfere with the lives of people but to protect them from usurpation. To that end, governments may adjudicate disputes that might otherwise spill into open conflict. Otherwise, governments should stay out of people’s affairs. 

“The view that government’s role is to serve as an umpire to prevent individuals from coercing one another was replaced by the view that government’s role is to serve as a parent charged with the duty of coercing some to aid others.”

Beginning with the Great Depression, the American view of government’s purpose shifts from protector to parent. No longer are people responsible for the repair of their economic problems, but instead others are required to provide assistance.

“We are still free as a people to choose whether we shall continue speeding down the ‘road to serfdom,’ as Friedrich Hayek entitled his profound and influential book, or whether we shall set tighter limits on government and rely more heavily on voluntary cooperation among free individuals to achieve our several objectives.”

The attraction of big government is its promise to do good things that the rest of us can’t. This is a false hope that leads to suppression of liberty and economic stagnation. Realizing this is one thing, but reversing the steady encroachment of government is another. A government check comes monthly, but the prosperity from personal freedom may not arrive until much later.

“[…] we know of no society that has ever achieved prosperity and freedom unless voluntary exchange has been its dominant principle of organization.” 

Countries that run their economies from the top down find they must struggle to make gains, while economies that self-organize voluntarily are much more efficient and tend to grow rapidly.

“In a command system envy and dissatisfaction are directed at the rulers. In a free market system they are directed at the market.”

If our economic outcomes seem unfair, we are likely to blame those who pay us. In the free market, chance—a bad boss, bad weather during selling season, a layoff—plays a huge role, sometimes negating what we believe is our due. This contributes to widespread animosity toward the market system and particularly toward the corporations for whom we labor and from whom we buy things.

“A major problem in achieving and preserving a free society is precisely how to assure that coercive powers granted to government in order to preserve freedom are limited to that function and are kept from becoming a threat to freedom. The founders of our country wrestled with that problem in drawing up the Constitution. We have tended to neglect it.”

The first function of government is to protect citizens from attack, either by invaders or fellow citizens. To achieve this, governments must wield an overwhelming monopoly of force. Such power tempts its wielders toward purposes other than protecting liberty. In the process, citizens find themselves assaulted by their own government.

“Wherever the state undertakes to control in detail the economic activities of its citizens, wherever, that is, detailed central economic planning reigns, there ordinary citizens are in political fetters, have a low standard of living, and have little power to control their own destiny.”

It is freedom, not planning, that creates the groundwork for prosperity. Collectivists argue that control protects people from oppression and poverty, but the prosperity that flourishes in free nations puts the lie to that notion.

“When you vote daily in the supermarket, you get precisely what you voted for, and so does everyone else.”

The ballot box gives us a chance to choose one platform of policies over another, but often we lose the vote and must put up with policies we dislike. The marketplace, on the other hand, provides us with a cornucopia of choices, and when we “vote” for one by purchasing it, we win that vote every time.

“The depression convinced the public that capitalism was defective; the war, that centralized government was efficient.” 

At the end of World War II, America is flush with victory and its economy is in much better shape than during the Depression. This makes it easy to conclude that central control of the economy is a good thing. A nation at war can withstand privation proudly, but a country at peace has different needs, and central control soon palls.

“Today all of us are paying out of one pocket to put money—or something money could buy—in the other.” 

Public assistance programs begin small, and taxpayers are willing to help. Over time, the programs expand until nearly everyone is receiving some sort of benefit while paying taxes to support someone else’s.

“The waste is distressing, but it is the least of the evils of the paternalistic programs that have grown to such massive size. Their major evil is their effect on the fabric of our society. They weaken the family; reduce the incentive to work, save, and innovate; reduce the accumulation of capital; and limit our freedom. These are the fundamental standards by which they should be judged.” 

Government programs become inefficient and corrupt, loading the nation with financial burdens while producing little or no benefit. Worse yet is the harm done to freedom, personal responsibility, and prosperity. Families break down under welfare, citizens must obey increasingly onerous regulations, and chances for growth and prosperity are wasted. The very programs meant to improve America instead do it harm.

“Not birth, nationality, color, religion, sex, nor any other irrelevant characteristic should determine the opportunities that are open to a person—only his abilities.” 

This is the concept of equality—and, by extension, of freedom—that for a time dominated American liberal thinking until it was set aside for the idea of equality of outcome.

“Government measures that promote personal equality or equality of opportunity enhance liberty; government measures to achieve ‘fair shares for all’ reduce liberty.” 

Governments do well when they remove barriers to opportunities, but they do damage when they try to force outcomes to be the same for all. Restrictions meant to compel equal outcomes will reduce individual freedom. No policy can guarantee perfect equality, so restrictions must continuously expand in an attempt to remove the remaining inequalities, until freedom becomes a memory.

“Henry Ford acquired a great fortune. The country acquired a cheap and reliable means of transportation and the techniques of mass production.” 

If the government promises fairness for all, it will severely limit its citizens’ options, and the massive productivity that comes from the chances taken by entrepreneurs will cease.

“When the law interferes with people’s pursuit of their own values, they will try to find a way around. They will evade the law, they will break the law, or they will leave the country.” 

Efforts to compel equality of outcome bump up against the innate human desire to better oneself and one’s family. No matter the law, people will do what they believe they must to protect those fundamental interests. Forced fairness leads to lawbreaking and cheating on a massive scale that can no more be squelched than can a tiger be made to eat carrots.

“Nowhere is the gap between rich and poor wider, nowhere are the rich richer and the poor poorer, than in those societies that do not permit the free market to operate.” 

Top-down commands that limit citizens’ economic opportunities will benefit rulers, who assign largesse to themselves. Ordinary people under such regimes, burdened by restrictions, have little hope to raise themselves even to middle-class status. Market societies, on the other hand, though they permit some to amass great wealth, also unleash the ambitions of everyone else, who can use their freedom to generate prosperity for themselves and their families.

“A society that puts equality—in the sense of equality of outcome—ahead of freedom will end up with neither equality nor freedom.” 

The push for equality of outcome tends to uproot freedom while making worse the inequalities already suffered by societies. Thus the two fundamental purposes of modern governance, freedom and equality, are desecrated. This is one of the most famous Friedman sayings; it sums up their thesis.

“Every act of intervention establishes positions of power. How that power will be used and for what purposes depends far more on the people who are in the best position to get control of that power and what their purposes are than on the aims and objectives of the initial sponsors of the intervention.” 

Government is managed not by angels but by humans whose interests and needs often conflict with the ideals of the programs they administer. Officials will, where possible, administer programs in ways that quietly increase their pocketbooks and influence, sometimes at the expense of the very people they are meant to serve. The simplest way is to administer programs ineffectively, then argue that the legislature hasn’t budgeted enough to get the job done. This results in government programs that continue to grow in size, complexity, burdensomeness, and cost, even while failing in their purposes. What begins with high expectations ends up nowhere near its intended destination. 

“The way the FDA now behaves, and the adverse consequences, are not an accident, not a result of some easily corrected human mistake, but a consequence of its constitution in precisely the same way that a meow is related to the constitution of a cat.” 

The FDA’s fear of approving drugs that might cause deaths and generate horrible publicity is inherent in the agency’s makeup. Saying, “We favor the FDA and only wish to speed up its approval process” is like saying, “We want to change a cat’s meow to a bark,” or “We like the sky the way it is, except it should be green.” The simple fact is that regulators will be punished for approving drugs that cause disasters, but they’ll suffer no ill effects from failing to approve drugs that would have saved lives, as that cost will remain hidden. 

“The error of supposing that the behavior of social organisms can be shaped at will is widespread. It is the fundamental error of most so-called reformers.”

Laws can have unexpected negative side effects. Some of these come from people who resist changes forced on them, and some stem from the complex pressures felt by regulators. Reformers, unwilling to believe that their idealistic standards cannot improve human nature, instead blame bad people and push for more regulation.

“Industrialization has raised new problems, but it has also provided the means to solve prior problems.”

Business is often blamed for society’s troubles, some of which do arise as side effects of product innovations. Businesses also sponsor technical advances that solve those problems in ways arguably better than government regulations can achieve.

“Perfection is not of this world. There will always be shoddy products, quacks, con artists. But on the whole, market competition, when it is permitted to work, protects the consumer better than do the alternative government mechanisms that have been increasingly superimposed on the market.”

In general, the marketplace regulates itself much better than can a distant bureaucracy. Products become safer, less expensive, and higher quality when consumer choice disciplines the process. Scandals, however, anger many, who then demand quick and forceful action laid down over the entire marketplace. Though initially satisfying, such action usually causes more problems than it solves.

“The high rate of unemployment among teenagers, and especially black teenagers, is both a scandal and a serious source of social unrest. Yet it is largely a result of minimum wage laws.” 

Businesses resist being forced to pay for things that cause them to lose money. Workers whose skills aren’t worth the minimum wage cannot legally bargain for a lower wage simply to be employed, and therefore won’t be hired. This has hurt black teens most of all, who, to begin with, suffer from incompetent inner-city public education, and their high unemployment rates of up to 40% have contributed to delinquency and jail time.