In one of the more memorable exchanges of the interview, Donahue asks Friedman a question many are still asking today:

When you see around the globe, the maldistribution of wealth, the desperate plight of millions of people in underdeveloped countries. When you see so few “haves” and so many “have-nots.” When you see the greed and the concentration of power. Did you ever have a moment of doubt about capitalism and whether greed is a good idea to run on?

Friedman’s reply has become standard among capitalists like me. “Is there some society you know that doesn’t run on greed?”

Friedman continued:

You think China doesn’t run on greed? What is greed? Of course, none of us are greedy, it’s only the other fellow who is greedy. The world runs on individuals pursuing their separate interests.

The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way.

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 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 a free enterprise system.

In the years since the Donahue interview, the free enterprise system has continued to improve the lot of ordinary people. Yet today, possibly more than in Friedman’s day, Americans are showing support for socialist policies. Shockingly, a 2019 Gallup poll found that four out of ten Americans supported some form of socialism.

What happened? How can socialism be gaining popularity even as confidence in capitalism wanes? The problem is that a defense of capitalism like Friedman’s satisfies the head but not the heart. When people—especially young people—look around the world today, many of them see it as Donahue described it. As a result, they question the morality of capitalism.

Enter Arthur Brooks.

Brooks is the past president of the American Enterprise Institute, a social scientist, a former university professor, and a former professional French horn player. Yes, you read that right. Brooks has written best-selling books such as The Conservative Heart: How to Build a Fairer, Happier, and More Prosperous America and Love Your Enemies: How Decent People Can Save America from the Culture of Contempt.

Recently, Brooks released a documentary, The Pursuit, which is now available on Netflix.

In it, he asks, “From 1970 until today, the percentage of the world’s population living at starvation’s door has decreased by 80 percent. Two billion people have been pulled out of starvation level poverty. What did that?”

His answer is the same as Friedman’s—free enterprise. Indeed, the messages of Free to Choose and The Pursuit are essentially the same: No other system has succeeded like free enterprise in allowing people to direct their own destiny and pull themselves out of poverty.

The key difference between the two is that when Brooks discusses how to help the most disadvantaged, it’s clear that he’s making not just an intellectual argument but also an emotional appeal. He cares about human flourishing.  From the very beginning, he frames the argument for capitalism as a moral one, saying “the point of the American experience is basically a moral consensus that our society should push opportunity to the people who need it most. This is our pursuit, and it’s predicated on two fundamental moral principles: human dignity and human potential.” Brooks shows us this as he walks the streets of India, once a scene of abject poverty during the days of democratic socialism. Now, after free enterprise has been released, we see progress. Hindol Sengupta, editor-at-large of Fortune India, says it like this, “Capitalism allows human beings to choose an action to fulfill their own destiny. . . . Forget per-capita GDP—we didn’t even have per-capita hope.”  

None of this is to say Friedman did not care about the poor, but his arguments can come across as those of an academic. They are for the head. Through The Pursuit, Brooks provides the answer for the heart.

Add The Pursuit to your list of required viewing. Go watch it . . . after you watch the Friedman interview.

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Arthur C. Brooks, president of the American Enterprise Institute, recently argued that significant amounts of such dead capital could be brought to productive life if only local governments would stop protecting vested interests and allow entrepreneurs to invigorate their local economies.

How? There are new, exciting companies that empower individuals to improve their economic condition and, at the same time, improve the productivity of capital. One example is the ridesharing service Uber. Uber brings together those with empty passenger seats and those needing a ride across town. My experience (unfortunately, not in Saint Louis) is that Uber rides showed up faster than traditional taxis and that the drivers were more attentive to my needs. Because Uber drivers are rated by riders even in transit, poor drivers can lose business for inadequate service. Competition drives out poor performers.

Airbnb is a market solution to the problem of underutilized housing capital. With excess bedrooms in the United States, why not allow the owners of those empty rooms to satisfy the needs of individuals seeking a place to stay for a night or two? The needs of those willing and able to pay for a room are served and the owner is rewarded with, especially in these still-difficult times, an extra bit of income.

Unfortunately, a maze of state and local regulations block Uber and Airbnb from operating in many locales. “Governments have their own golden opportunity,” Brooks writes, “to exercise creativity in service of the common good, whether that entails rethinking anachronistic zoning laws or adjusting tax policies that treat someone’s spare bedroom the same as a Marriott suite.”

If bringing dead capital to life is good for the economy, isn’t it time for politicians and regulators to awaken to the potential benefits that such services can provide?

The post Bring Dead Capital to Life appeared first on Show-Me Institute.

• A look at the Show-Me Institute’s new policy questionnaire, “Principles or Politics?”
• A message from Executive Director Brenda Talent
• We profile the three latest additions to the Show-Me Institute staff.
• Fellow Andrew Wilson reports on how the latest tax changes in Kansas will impact Missouri jobs.
• Why Charles Willey, M.D., tireless advocate for free-market healthcare reforms, supports the Show-Me Institute.
• A review of Road to Freedom: How to Win the Fight for Free Enterprise, the latest book by Arthur Brooks, who recently spoke in Saint Louis at a Show-Me Institute co-sponsored event.
• Education Policy Analyst James Shuls reports on how Missouri’s schools are “stuck in the middle” in terms of academic achievement.
• An overview of some of our scholars recent appearances on broadcast media.
• An article on the recent effects that TIF and eminent domain have had on the Saint Louis County neighborhood of Hadley Township

The post Show-Me Newsletter: 2012, Number 3 appeared first on Show-Me Institute.

The post Is “Fairness” What Makes America Great? appeared first on Show-Me Institute.

The post Are Free Markets Only Good for the Rich? appeared first on Show-Me Institute.

I asked Forbes about the tornado of tax cuts that have recently swept across Kansas. He stated that what Kansas is doing is highly important and that states have a tendency to imitate successful actions that their neighbors implement. He used welfare reform as an example of one state enacting a significant policy change and other states following suit. Missouri should be following Kansas’ lead, just as Oklahoma and Nebraska are considering doing.

Missouri already lags behind its neighbors economically. In the past, we have argued that the state should eliminate its corporate income tax in order to boost Missouri’s economic growth. The Show-Me Institute has also examined ways that Missouri could eliminate the income tax entirely.

Missouri’s neighbors are moving forward. The state is at a decision point; will it make real changes or will it stick to the status quo?

The post Conference Call For Freedom appeared first on Show-Me Institute.

Essential to the message Brooks conveyed is the idea that proponents of free markets should focus less on cold data such as tax rates and more on individual stories of human flourishing brought about by reduced barriers to trade and robust property rights.

This event was held at and co-sponsored by the Saint Louis University John Cook School of Business.

Our next SLU Speaker Series event.

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