Free Market Revolution

1. The growth of government is driven by flawed moral arguments

The question no one ever asks is: Why is that supposed to be good?

The Argument from Greed posits that profit-seeking businessmen are inherently greedy and must be restrained by government regulation. This ignores how free markets channel self-interest into serving others through voluntary trade. The Argument from Need claims that people's needs create a moral entitlement to others' wealth, justifying redistribution. This disregards personal responsibility and property rights. Both arguments stem from altruism - the idea that self-sacrifice is the highest virtue. This flawed premise has allowed steady government expansion, as any limitation is seen as "heartless."

Key flaws in pro-government arguments:

• Assume businessmen are motivated solely by greed
• Ignore how markets incentivize serving others
• Treat need as an automatic claim on others' wealth
• Disregard personal responsibility and property rights
• Based on altruism as the highest moral ideal

2. Selfishness is misunderstood and unfairly demonized

It isn't selfish to sacrifice others to yourself.

Selfishness redefined. Conventional morality equates selfishness with exploiting others, like Bernie Madoff's Ponzi scheme. But rationally pursuing one's long-term interests requires honesty and respect for others' rights. Steve Jobs pursued his self-interest by creating products people wanted to buy voluntarily. True selfishness is rational. It means thinking independently, being productive, and dealing with others through mutually-beneficial trade. This creates value rather than destroying it.

Characteristics of rational selfishness:

• Independent thinking
• Productive work
• Voluntary trade
• Long-term perspective
• Creating value, not exploiting others

3. Rational self-interest is the foundation of a moral and prosperous society

The purpose of morality is to teach you, not to suffer and die, but to enjoy yourself and live.

Happiness as the goal. Morality should guide us toward successful, fulfilling lives - not self-sacrifice. Rational self-interest means pursuing one's objectively-determined long-term interests through reason, productivity and trade. This creates a harmonious society where people deal with each other voluntarily for mutual benefit. Virtues of rational selfishness. Key virtues include rationality (facing facts), productiveness (creating value), and justice (dealing with others based on merit). These fuel personal success and social progress.

Benefits of a society based on rational self-interest:

• Incentivizes value creation and innovation
• Promotes voluntary cooperation
• Rewards merit and ability
• Aligns individual and social interests
• Leads to material and spiritual prosperity

4. Free markets unleash human potential and innovation

Capitalism is the system that liberates the Fords from the Tugwells.

Markets harness reason. Capitalism allows individuals to freely use their minds to create wealth and pursue their vision. The division of labor multiplies human knowledge and productivity. Price signals coordinate economic activity without central planning. Competition drives constant improvement and innovation. The dynamism of freedom. This process of "creative destruction" has produced unprecedented prosperity, transforming the world through an endless stream of new goods, technologies and opportunities.

Key mechanisms of free market dynamism:

• Division of labor
• Price system
• Competition
• Profit motive
• Entrepreneurship
• Innovation

5. Government intervention distorts markets and harms prosperity

Government controls and regulations inject force into capitalism's system of voluntary cooperation. Like a wrench in the gears, the result is to handicap the price system and competition, and thereby the entire division of labor.

Distorting market signals. Price controls, subsidies, and regulations interfere with the price system's ability to coordinate economic activity. This leads to shortages, surpluses, and misallocation of resources. Stifling competition and innovation. Government monopolies, bailouts, and antitrust laws reduce competitive pressure to improve and innovate. Licensing and other barriers to entry protect established firms from upstart challengers. The result is less dynamism, efficiency and progress than a free market would produce.

Ways government intervention harms markets:

• Distorts prices and resource allocation
• Creates artificial shortages or surpluses
• Reduces competitive pressure to improve
• Protects inefficient firms and practices
• Stifles innovation and entrepreneurship
• Misallocates capital to political favorites

6. The regulatory state punishes producers and stifles progress

Regulation, in short, is nothing more than government force directed at the minds of America's producers. It paralyzes their thinking, undermines their productivity, and restricts their ability to engage in voluntary, value-for-value trade.

Crushing bureaucracy. Regulations impose enormous compliance costs, paperwork burdens, and legal risks on businesses. This diverts resources from productive activities to dealing with red tape. Arbitrary power. Vague and complex regulations give bureaucrats arbitrary power over the economy. This creates uncertainty and makes businesses hesitant to invest or innovate. Barrier to entry. Regulatory costs hit small businesses and startups hardest, protecting established firms from competition.

Costs of the regulatory state:

• Compliance costs and paperwork burdens
• Legal risks and uncertainty
• Diversion of resources from productive uses
• Barriers to entry for new businesses
• Slower innovation and economic growth
• Arbitrary power of unelected bureaucrats

7. The entitlement state sacrifices the productive to the unproductive

The entitlement state is geared not to the unable but to the unwilling. The sacrifice of the rational and productive to the irrational and unproductive is not some unintended consequence of a noble plan—it is the whole point.

Perverse incentives. Welfare programs reduce the incentive to work, save, and be self-reliant. This creates a culture of dependency and entitlement. Burden on producers. Entitlements forcibly redistribute wealth from the productive to the unproductive. This punishes success and rewards failure. Unsustainable growth. As more people become net recipients rather than contributors, the system becomes financially unsustainable. Yet attempts to reform entitlements face fierce political resistance.

Problems with the entitlement state:

• Reduces incentives for productivity and self-reliance
• Fosters a culture of dependency
• Punishes success and rewards failure
• Places an increasing burden on productive citizens
• Creates unsustainable financial obligations
• Becomes politically difficult to reform

8. A free market in healthcare would improve quality and reduce costs

If government intervention is the cause of the health care crisis, it doesn't take Dr. House to identify the cure.

Government distortions. Medicare, Medicaid, and tax incentives for employer-provided insurance have separated consumers from the true costs of healthcare. This has driven up demand and prices. Regulations restrict competition and innovation. Market solutions. A free market would allow real price competition, new business models, and consumer-driven innovation. People could choose insurance plans tailored to their needs and budget. Price transparency would incentivize efficiency and cost-cutting.

Benefits of free market healthcare:

• Lower costs through price competition
• Greater innovation in business models and treatments
• Insurance options tailored to individual needs
• Price transparency to drive efficiency
• Consumer choice and control
• Separation of health insurance from employment

9. Ayn Rand's philosophy provides the moral defense capitalism needs

Capitalism is the system of selfishness—of rational selfishness.

Moral foundation. Rand's philosophy of Objectivism provides the moral case for individual rights, rational self-interest, and laissez-faire capitalism. This gives defenders of free markets the intellectual ammunition to challenge altruism and collectivism. Consistent vision. Unlike conservatives who try to mix free markets with altruism, Rand offers a fully consistent pro-capitalist worldview. This can inspire a principled movement to roll back government and expand freedom.

Key elements of Rand's defense of capitalism:

• Individual rights as the moral foundation
• Rational self-interest as ethical
• Reason, purpose and self-esteem as virtues
• Rejection of altruism and collectivism
• Government limited to protecting rights
• Separation of economy and state

Last updated: July 21, 2024