From the Summit of the Moral High Ground

Milton Friedman once said, “If you put the federal government in charge of the Sahara Desert, in five years there'd be a shortage of sand.” The great economist wasn’t just being cute. He was pointing to a very serious problem with government management of resources. And in this chapter, we’ll talk about why it’s a problem. But first we should ask: Why are people so concerned that we will run out of resources? And how can we find a reasonable balance between using resources and conserving them? When most people think about resources, they think about the possibility they might be used up. And running out of resources means there will be nothing left for future generations. This scares people. So the notion goes something like: If parents let kids get into the groceries on the first night of the camping trip, there won’t be any sandwiches left for the picnic. The parents wisely ration the resources and restrict the kids’ access so that there is something left for later. People w...

Income Inequality Arises From Market Forces and Requires Government Intervention Inequality is everywhere. In a rainforest, mahogany trees take up more water and sunlight than all the other plants and animals. In our economic ecosystems, entrepreneurs and investors control more of the assets than the rest of us do. No one worries about the mahogany trees, and yet there is terrible fretting about the wealthy. In the case of ecosystems and economies, however, there are very good reasons for an unequal distribution of resources. The sources of some forms of inequality are better than others. For example, inequality produced by crony capitalism—or what Barron’s editor Gene Epstein refers to as “crapitalism”—is surely undesirable. Therefore, it’s important for us to make a distinction between economic entrepreneurs and political entrepreneurs: The former create value for society; the latter have figured out how to transfer resources from others into their own coffers, usually by l...

“Clichés of Progressivism,” a series of insightful commentaries covering topics of free enterprise, income inequality, and limited government. “Free people are not equal, and equal people are not free.” I wish I could remember who first said that. It ought to rank as one of the great truths of all time, and one that is fraught with profound meaning. Equality before the law—for instance, being judged innocent or guilty based on whether you committed the crime, not on what colour, sex, or creed you represent—is a noble ideal and not at issue here. The “equalness” to which the statement above refers pertains to economic income or material wealth. Put another way, then, the statement might read, “Free people will earn different incomes. Where people have the same income, they cannot be free.” Economic equality in a free society is a mirage that redistributionists envision—and too often are willing to shed both blood and treasure to accomplish. But free people are di...