Wednesday marks the 107th birthday of the late Milton Friedman, the Nobel Prize-winning economist whose work made some of the most eloquent arguments for economic freedom. As we celebrate, let’s take a moment to reflect on why it’s critical that we defend economic freedom in Colorado.
If this past legislative session and some current debates are any indication, there’s a perilous philosophy that seems to have overtaken the Golden Dome in Denver. They believe those in power must micromanage our personal and business affairs in accordance with their dictates.
As I previously wrote, “Democratic majorities were able to devastate Colorado’s oil and gas industry … [and] approved two TABOR-gutting bills for the 2019 ballot, one that would keep taxpayers’ refund moneys forever and another that would allocate those dollars.”
The onslaught against the Taxpayer’s Bill of Rights continues with Proposition CC, likely to appear on this year’s ballot, and it’s still possible Democrats will violate TABOR by passing a payroll tax disguised as a fee (for a government-instituted paid-family leave program).
Frequently, Democrats talk about “greed” and warn that government must step in to keep corporations and the rich from running roughshod over the health, welfare and safety of the people. Government should protect public interests, but the idea that greed is purely a byproduct of capitalism — and government can and should protect us from greed — is wrong.
In a profound 1979 interview with Phil Donahue, Friedman challenged this misnomer, and posed a fundamental question: “Is there some society you know that doesn’t run on greed?”
“The world runs on individuals pursuing their separate interests,” he continued. “The great achievements of civilization have not come from government bureaus. ... In the only cases in which the masses have escaped from the kind of grinding poverty you're talking about, the only cases in recorded history, are where they have had capitalism and largely free trade.
“If you want to know where the masses are worse off, worst off, it's exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear that there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free-enterprise system.”
Friedman was exactly right. While free enterprise allows individuals to pursue their own self-interest through voluntary exchange, that doesn’t mean it lets “greed” run rampant. And those concerned about money in politics should be more fearful of the inverse: There’s too much politics in money. Government officials, who, unlike the private sector, can act with force, deeply intertwine themselves in our lives and businesses, inviting special interests to lobby and corrupt.
Moreover, capitalism — not socialism — is the only economic system that unleashes the unlimited potential of every individual. The United States is a prime success story, but not the only one.
Take India. Until 1991, when India finally began opening up their economy and embracing free trade, its people were trapped in unbearable poverty. In 1991, prosperity finally started to expand. From 2004 to 2018, more than 350 million Indians escaped extreme poverty of less than a $1.90 a day. Because about 41 Indians are unchained from it every minute, estimates hold that only 0.1% of the country’s population will be in extreme poverty by 2030. Remarkable, the fruits of capitalism!
Many wishing to intervene “for the public good” are well-intentioned. But as Friedman observed in 1975, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” Government control, unlike free markets, tends to bring about detrimental results.
Friedman was fond of pointing out, rightly, that government’s essential purpose is to protect our individual rights. It’s not supposed to mandate minimum wages, micromanage businesses and tax us more to provide numerous “benevolent” programs.
The lessons of Milton Friedman are plentiful. They remind Coloradans why individual freedom is worth defending. So, in celebration of Uncle Milton's 107th birthday, let’s blow out the candles of government control and celebrate the gift of free markets!
Jimmy Sengenberger is the host of Business for Breakfast on KDMT Denver’s Money Talk 1690 AM and The Jimmy Sengenberger Show on News/Talk 710 KNUS. He is the President and CEO of the Denver-based Millennial Policy Center.