This is part of a series on Milton Friedman’s “Free to Choose.” In my previous post I explained why the government should not regulate tariffs due to their harmful consequences toward consumers and innovation. This is part five of a series on Free to Choose by Milton Friedman. In the second chapter, Friedman writes on the role of government as it relates to trade. He makes a strong case for free trade, and specifically focuses on international trade. Economic arrangements are attached to political arrangements among countries. “International free trade fosters harmonious relations among nations that differ in culture and institutions,” just as the same thing happens domestically at a smaller scale. Cooperation among the countries is the rule, and both sides end up happy if they believe they benefit. Otherwise the trade would not take place. However, once government intervenes, problems begin to rise. If regulation occurs within a country, there is fierce lobbying between businesses to gain exemptions to regulations or for subsidies. The matter only gets worse when you consider trade agreements between two nations. If the government stayed out of regulation, there would be peace and harmony between the two businesses trading. Yet, instead, “high government officials jet around the world to trade conferences” and tension is developed. Instead of a completely private agreement between two companies, the collectivist bureaucrats of their countries represent the businesses. It is then that the economic matters become political ones, and may even lead to deadly consequences: trade becomes a political weapon. Consider how our federal government uses trade agreements as leverage between Asian or South American countries. In my humble opinion, this just gives politicians another thing to keep busy about. They take time to have “hearings” that include irrelevant sources, use staffers to print up more paperwork and take time to find more politicians that can vote for their bill, etc. If there are no regulations, then there are no politicians wasting time and money harming the economy and diplomatic relations. Friedman uses the section “Central Economic Planning” to provide historical evidence that wherever there is central economic planning, “ordinary citizens are in political fetters, have a low standard of living, and have little power to control their own destiny.” Consider the stark contrast between East and West Germany. These people were of the same heritage, same skills and same knowledge. But one side had to build a wall not to stop people from coming in, but to stop people from leaving. As Friedman was writing this book, the wall still existed!
“Which [side] must man it today with armed guards, assisted by fierce dogs, minefields, and similar devices of devilish ingenuity in order to frustrate brace and desperate citizens who are willing to risk their lives to leave their communist paradise for the capitalist hell on the other side of the wall?”We know too well where socialism and communism lead. Why can’t we see the reality that these philosophies are taking over our own country? In schools we’re taught that FDR’s New Deal was that great thing to help people get through the Great Depression. In reality, he was responsible for extending it. We’re taught that LBJ had this great vision for the Great Society and his war on poverty. In reality, he’s extended it. We think the Department of Education (signed into law by Jimmy Carter) is well intentioned. Yet it is still central economic planning. That is socialism. On the other side of the Berlin wall, there were brightly lit, not dull, stores. The streets were filled with cheerful people, not empty and quiet. The newspapers provided all sorts of opinions, not one. The buildings were nicely built, unlike on the other side, where “wartime destruction ha[d] not yet been repaired after more than three decades.” The beauty of our system of government is that we have something to say and can change the way our government regulates the economy. Although we may have to work through the political corruption, it’s possible to bring real change to the path of statism with an irate minority or by having that minority grow to become a majority.