Free Markets

Over the next two years, we will have to continue to educate more Americans on why freedom, capitalism and limited government work and government expanding into every sphere of our lives and spending more and more of our money will result in loss of freedom and wealth.

For some of these lessons we can reach back decades. Here is Milton Friedman, one of the greatest economists of all times, explaining how the wealth accumulated by successful people benefits everyone through investments that create jobs and produce more consumer goods:

You can find more short videos of Milton Friedman answering questions like this on Common Sense Capitalism’s Youtube channel and blog.

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CNN’s Fareed Zakaria gives a great demonstration of what’s wrong with the left-wing media. He advocates more spending and more taxes by government. His argument for a national sales tax is that other countries have such a tax. The idea that the government must direct innovation is so ingrained in his mind that it doesn’t even occur to him that the private sector can be the engine of innovation like it has in the past if the government just gets out of the way. This is what’s wrong with America’s self-anointed intellectual elite.

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Over the past twenty-four hours the world has witnessed the rescue of 33 Chilean miners who had been trapped underground for sixty-nine days after a mining accident. Human perseverance and ingenuity have succeeded despite initially daunting odds.

Compare two commentators on the rescue and its causes and the crude smears in one vs. the fascinating details on what made the rescue possible provided in the other:

Chris Matthews of MSNBC cannot stop himself from using the rescue of the miners to make dumb political smears: if these were Tea Party people, “they wouldn’t have gotten out, they would have been killing each other in two days.”

Hot Air’s Allahpundit comments:

Is he suggesting that tea partiers are so committed to the “every man for himself” ethos of individualism that they oppose on principle any form of mutually beneficial cooperation — especially between desperate miners or, say, U.S. troops trapped in a survival situation? Does he not get that the reason most conservatives want less government is because they believe that people’s lives will improve that way — i.e. that liberty is a means to the end of maximizing welfare, which sort of cuts against the “tea-party miners killing each other” scenario? Does he at least understand that small government does allow for some government, and that fiscal conservatism fully allows for charity for people in need — like, say, a few dozen men trapped in a hole half a mile down? What the hell is he talking about here?

With stupid comments like this our first inclination is to put politics aside and rejoice in the success of people working against the odds to save the lives of 33 miners. However, there are reasons why the Chilean miners were saved. Ignoring them would do a disservice to people who will inevitably need help in future accidents and disasters.

David Henninger of the Wall Street Journal also links the story to politics. However, he does not resort to cheap smears, but rather discusses how inventions made possible by the free market saved 33 miners who twenty-five years ago would have died a slow and painful death:

The details of the inventions utilized to keep the miners alive and to rescue them are fascinating. You will not read about them in well-meaning mainstream media human interest stories or hear about them from Chris Matthews’ smear jobs. But it is important to understand why this rescue mission was such a success if we want to preserve the conditions that stretch what human beings are capable of in the pursuit of happiness and sometime just plain survival. Here is more from David Henninger’s column:

If those miners had been trapped a half-mile down like this 25 years ago anywhere on earth, they would be dead. What happened over the past 25 years that meant the difference between life and death for those men?

Short answer: the Center Rock drill bit.

This is the miracle bit that drilled down to the trapped miners. Center Rock Inc. is a private company in Berlin, Pa. It has 74 employees. The drill’s rig came from Schramm Inc. in West Chester, Pa. Seeing the disaster, Center Rock’s president, Brandon Fisher, called the Chileans to offer his drill. Chile accepted. The miners are alive.

Longer answer: The Center Rock drill, heretofore not featured on websites like Engadget or Gizmodo, is in fact a piece of tough technology developed by a small company in it for the money, for profit. That’s why they innovated down-the-hole hammer drilling. If they make money, they can do more innovation.

This profit = innovation dynamic was everywhere at that Chilean mine. The high-strength cable winding around the big wheel atop that simple rig is from Germany. Japan supplied the super-flexible, fiber-optic communications cable that linked the miners to the world above.

A remarkable Sept. 30 story about all this by the Journal’s Matt Moffett was a compendium of astonishing things that showed up in the Atacama Desert from the distant corners of capitalism.

Samsung of South Korea supplied a cellphone that has its own projector. Jeffrey Gabbay, the founder of Cupron Inc. in Richmond, Va., supplied socks made with copper fiber that consumed foot bacteria, and minimized odor and infection.

Chile’s health minister, Jaime Manalich, said, “I never realized that kind of thing actually existed.”

That’s right. In an open economy, you will never know what is out there on the leading developmental edge of this or that industry. But the reality behind the miracles is the same: Someone innovates something useful, makes money from it, and re-innovates, or someone else trumps their innovation. Most of the time, no one notices. All it does is create jobs, wealth and well-being. But without this system running in the background, without the year-over-year progress embedded in these capitalist innovations, those trapped miners would be dead.

Some will recoil at these triumphalist claims for free-market capitalism. Why make them now?

Here’s why. When a catastrophe like this occurs—others that come to mind are the BP well blowout, Hurricane Katrina, various disasters in China—a government has all its chips pushed to the center of the table. Chile succeeds (it rebuilt after the February earthquake with phenomenal speed). China flounders. Two American administrations left the public agog as they stumbled through the mess.

Still, what the political class understands is that all such disasters wash away eventually, and that life in a developed nation reverts to a tolerable norm. If the Obama administration refuses to complete free-trade agreements with Colombia, South Korea and Panama, no big deal. It’s only politics.

But that’s not true. Getting a nation’s economics right is more important than at any time since the end of World War II. Chile, Colombia, Peru and Brazil are pulling away from the rest of their hapless South American neighbors. China, India and others are simply copying or buying the West’s accomplishments.

The U.S. has a government led by a mindset obsessed with 250K-a-year “millionaires” and given to mocking “our blind faith in the market.” In a fast-moving world filled with nations intent on catching up with or passing us, this policy path is a waste of time.

The miners’ rescue is a thrilling moment for Chile, an imprimatur on its rising status. But I’m thinking of that 74-person outfit in Berlin, Pa., whose high-tech drill bit opened the earth to free them. You know there are tens of thousands of stories like this in the U.S., as big as Google and small as Center Rock. I’m glad one of them helped save the Chileans. What’s needed now is a new American economic model that lets our innovators rescue the rest of us.

For more on the ingenuity applied to the rescue effort read Matt Moffitt’s Sept. 30 story.

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A little humor with a serious message on the bankrupt Keynesian economic ideas of the Democrats:

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Who would have thought just a few years ago that we have to look to “Old Europe” for countries pursuing sounds economic policies?

Meanwhile President Obama and the Democrats continue to pursue the European socialist policies of the past wanting more Keynesian government spending, the government picking winners and losers in the private economy and refusing to prevent the biggest tax increase in US history in 2011.

Germany’s Chancellor Angela Merkel, on the other hand, has cut billions of dollars in spending and cut some taxes and the German economy is booming. It is ironic that at least some Europeans are learning the lessons of the free market that we pursued in the past, while America has an arrogant, stubborn president and ruling party that insists on taking us down the road to European socialism.

On November 2, we get to reject the ideology and incompetence of the Democrats in Congress by voting them out of office.

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