Category: Free Markets

Milton Friedman Made the Case for Freedom to 15 Million Viewers

New York Times reviewer Szalai says that watching Milton Friedman’s “Free to Choose” documentary today is a surreal experience. To the contrary, I say that watching Milton Friedman’s documentary today is an exhilarating experience and watching the the evening news today is a surreal experience. (As a graduate student at the University of Chicago, I was in the audience for a couple of the episodes of Milton Friedman’s “Free to Choose” documentary.)

(p. C1) The documentary series “Free to Choose,” which aired on public television in 1980 and was hosted by the libertarian economist Milton Friedman, makes for surreal watching nowadays. Even if Ronald Reagan would go on to win the presidential election later that year, it was still a time when capitalism’s most enthusiastic supporters evidently felt the need to win the public over to a vision of free markets and minimal government.  . . .

They had an enormous audience: The 15 million viewers who watched the first episode saw an avuncular Friedman (diminutive and smiling), leaning casually against a chair in a Chinatown sweatshop (noisy and crowded), surrounded by women pushing fabric through clattering sewing machines. “They are like my mother,” Friedman said, gesturing at the Asian women in the room. She had worked in a factory too, after immigrating as a 14-year-old from Austria-Hungary in the late 19th century. Friedman explained that these low-wage garment workers weren’t being exploited; they were gaining a foothold in the American land of plenty. The camera then cut to a tray of juicy steaks.

For the full review, see:

Jennifer Szalai. “Sounding an Alarm Over America’s Values.” The New York Times (Saturday, February 18, 2023): C1 & C4.

(Note: ellipsis added.)

(Note: the online version of the review was updated Feb. 17, 2023, and has the title “Is the Marriage Between Democracy and Capitalism on the Rocks?”)

The book based on Milton Friedman’s documentary is:

Friedman, Milton, and Rose D. Friedman. Free to Choose: A Personal Statement. New York: Harcourt Brace Jovanovich, Inc., 1980.

Betting on Elections Is a Form of Free Speech

(p. A17) The Commodity Futures Trading Commission has moved to shut down PredictIt, an online marketplace for futures contracts on the outcomes of political events, effective Feb. 15, 2023. This is a blow to investors in these contracts, such as those on the presidential election of 2024, who are left uncertain as to how their positions will be unwound. And it’s a blow to the public at large, because political futures have proven to have better predictive power than polls.

. . .

. . . in early 2020, . . . PredictIt listed a contract on whether the World Health Organization would declare Covid-19 a pandemic. According to John Phillips, chief executive of Aristotle, the firm that operates PredictIt, the CFTC telephoned to complain about that contract, saying it was in poor taste. The contract had already expired.

. . .

If investors can express their opinions on the future prices of corn and pork bellies, surely the First Amendment also protects their ability to do the same on elections and other political matters. It’s a matter of free speech that you can put your money where your mouth is.

For the full commentary, see:

Donald Luskin. “The Feds Don’t Want You Betting on Elections.” The Wall Street Journal (Wednesday, Nov. 2, 2022): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 1, 2022, and has the same title as the print version.)

Long Waits for Italian Cabs Due to Regulations Limiting More Cabs and Ride-Sharing

(p. A4) Returning to Rome from Naples one Monday afternoon in June [2023], a train trip that takes just over an hour, Daniele Renzoni said that he and his wife waited for more than an hour and a half at Termini station for a cab under a blazing sun.

“Just image a long line of grumbling, frustrated people, complaining, cursing. Hot day, angry tourists, there’s not much else to say,” said Mr. Renzoni, who is retired. “Taxi drivers will tell you there’s too much traffic, too many requests, too much everything, but the fact is, the customer pays.”

The situation is “a disgrace to Italy,” said Furio Truzzi, president of the consumer rights group Assoutenti, one of several associations that protested the shortage.

. . .

Thanks to the taxi lobby, ride-sharing services are almost nonexistent in Italy, where Uber is the only platform in use, with many restrictions.

The government lost an opportunity for real change, said Andrea Giuricin, a transportation economist at a research center at the University of Milan Bicocca. He said the best way to meet consumer needs would be to increase the number of licenses for Italy’s chauffeur services, known as N.C.C., which work with Uber.

“It’s very difficult in Italy” because “there isn’t a culture of liberalization in general,” creating little opportunity for competition, said Professor Giuricin. Taxis “are a small but powerful lobby” that easily influences politics, “which is very weak” in Italy, he said.

Angela Stefania Bergantino, a professor of transportation economics at the University of Bari, pointed out that previous governments had tried to open up the taxi market. But they failed.

“The problem is that taxis are regulated by municipal governments, which can find themselves captive in the sense that it is difficult for City Hall to implement policies that the cab lobby doesn’t like,” she said. “These are lobbies that have effective strike tools,” like wildcat strikes or traffic blockages that can paralyze entire cities, she said.

. . .

Above all, though licenses are issued by the city, they can then be sold by the drivers, for sums that can reach 250,000 euros, or about $276,000, depending on the city — a retirement nest egg for many. With an influx of new licenses, the value of an existing license would depreciate.

City administrators fear cabbies could revolt and strike if the status quo changes. “If I decide to issue new licenses,” said Eugenio Patanè, Rome’s city councilor in charge of transportation, “I’m going to find 1,000 taxis blocking traffic in Piazza Venezia,” the downtown Rome square that taxi drivers habitually clog while protesting.

For the full story, see:

Elisabetta Povoledo. “Getting a Cab in Italy Is Hard. But Remedying That Isn’t Easy.” The New York Times (Friday, August 11, 2023): A4.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date Aug. 10, 2023, and has the title “Getting a Taxi in Italy Is Too Hard. Fixing That Is Not Easy.”)

Socialist Alexandria Ocasio-Cortez (AOC) Buys Foreign Sunscreens Not Approved by U.S. Government F.D.A.

(p. 2) After months of prompting, I have finally managed to help my husband form a daily sunscreen habit. Whenever I see traces of paper white cream in his dark beard, I think, We’re halfway there.

Hoping to avoid the white cast, heaviness and greasiness common in many sunscreen products available in U.S. drugstores, some Americans, including Representative Alexandria Ocasio-Cortez of New York, have taken matters into their own hands, opting for sunscreens manufactured abroad. In a recent interview, the congresswoman said she toggled between Bioré in the summer and Beauty of Joseon in the winter — two Asian brands that employ active ingredients not approved for use in the United States.

“The technology is very sophisticated,” Ms. Ocasio-Cortez said. “You don’t feel like you have a layer of sunscreen on, and it kind of just feels like you’re putting on a moisturizer in that sense, which makes it easier to use.”

While sunscreen is regulated as a cosmetic in major skin-care hubs like South Korea, Japan and the European Union, in the United States, it falls under the purview of the Food and Drug Administration. Any drug product marketed to American consumers must be approved by the F.D.A., and because sunscreen “makes a drug claim” — namely, that it can prevent sunburn, decrease the risk of skin cancer and mitigate early skin aging — the agency regulates it as an over-the-counter drug.

The last time the Food and Drug Administration approved new active ingredients for use in sunscreens was more than two decades ago, and at times it can feel as if the rest of the world has surpassed the United States in the development of new sunscreen formulations and protocols. Skin-care influencers on TikTok and Instagram are in a near-constant state of frenzy over exciting new products and innovations that are nowhere to be found on American shelves. Currently there are 14 sunscreen filters approved for use by the F.D.A. The European Union employs more than 30.

Frustrated by what seems to be a wealth of more exciting options for sun protection overseas, skin-care-conscious Americans have been quick to point the finger at the F.D.A. for the delay in approving new active ingredients.

For the full story, see:

Sandra E. Garcia. “U.S. Sunscreen Is Stuck in the ’90s.” The New York Times, SundayStyles Section (Sunday, August 13, 2023): 2.

(Note: the online version of the story has the date Aug. 12, 2023, and has the title “U.S. Sunscreen Is Stuck in the ’90s. Is This a Job for Congress?”)

60-Year-Old Retired Musician Says She Will “Fetch a Gun” to Defend Taiwan’s Freedom

(p. A1) TAIPEI, Taiwan—People in Taiwan have been following every twist of the war in Ukraine. But, while their sympathy for the Ukrainian cause is near-universal, the conclusions for the island’s own future widely diverge.

To some, the takeaway is that even a seemingly invincible foe can be defeated if a society stands firm, an inspiration for Taiwan’s own effort to resist a feared invasion by China. Others draw the opposite lesson from the images of smoldering Ukrainian cities. Anything is better than war, they say, and Taiwan should do all it can to avoid provoking Beijing’s wrath, even if that means painful compromises.

. . .

(p. A8) “The young people are the ones who don’t want unification with China,” said ret. Lt. Gen. Chang Yan-ting, a former deputy commander of Taiwan’s air force. “But if you want independence, you need to fight, and they also don’t want to fight. Therein is the conflict.”

Yi-hao, a student in Taiwan’s National Defense University, was an exception. “Before the war in Ukraine, we were taught that Russia’s military power is stronger than China’s, and Taiwan’s military was stronger than Ukraine’s,” he said. “If they were able to resist this long, Taiwan will definitely be able to hold out.” He didn’t want his surname used because he wasn’t authorized by the military to speak.

Lai Yi-chi, who became a lieutenant after graduating from the Naval Academy in June [2023], said that she had been inspired by the bravery and resilience of Ukrainian soldiers, something often discussed in her classes. “We should also embody such spirit and determination,” she said.

Bypassing the official armed forces, some volunteer groups have decided to act on their own, preparing fellow citizens for a possible war. One such group is Kuma Academy, which received a $100 million donation from Robert Tsao, the founder of the United Microelectronics, one of the world’s biggest semiconductor companies.

“We don’t intend to build up a private army,” Tsao said. “But I think their effort will probably increase the resilience of Taiwan’s society. If we know how to hide, how to help each other, how to retain communication, we can pretty much reduce the damage in wartime.” Some of the students also like to learn more martial skills, such as shooting, Tsao said, but Taiwan’s strict gun laws make it difficult. Some 25,000 Taiwanese have been trained at Kuma.

Nico Li, a 60-year-old retired musician attending a Kuma class, said she was unnerved by growing risks coming from China, and wanted to arm herself to avoid being a burden to her children. “Taiwan is an island of treasure. I don’t want to hand it over to others without a fight,” Li said, referring to what she sees as the Taiwanese values of freedom and democracy. “If I have the ability, I would even go and fetch a gun if necessary.”

At another training session, run by the Forward Alliance, dozens of Taiwanese practiced how to stop arterial bleeding with tourniquets and stabilize major wounds. “There is a sense of impending doom, of feeling very hopeless,” said one of the students, Eric Lin. “So, instead of sitting at home and browsing the negative news, I wanted to come here—so that I would be able to do something.”

For the full story, see:

Yaroslav Trofimov and Joyu Wang. “Taiwan’s Impossible Choice: Be Ukraine or Hong Kong.” The Wall Street Journal (Thursday, July 6, 2023): A1 & A8.

(Note: ellipsis, and bracketed year, added.)

(Note: the online version of the story has the date July 5, 2023, and has the same title as the print version.)

Milton Friedman Was a “Formative Intellectual Influence” to George Shultz

(p. A13) [George] Shultz, an unflamboyant personality once described by a college classmate as a “steady, plodding intellect,” reached the commanding heights of American government, holding four cabinet posts over his career from secretary of the Treasury to state. Shultz died in 2021 at the age of 100.

. . .

For a time Shultz was on track for a career in academia, working in the economics department at MIT and later the University of Chicago. “Chicago is what started me,” Shultz said. Milton Friedman, a formative intellectual influence and enduring friend, methodically deepened Shultz’s faith in free markets and his skepticism of government intervention in the economy. “Milton didn’t hit the tennis ball hard but it always came back,” Shultz once remarked, “which was reflective of the way he argued, too.”

. . .

. . . Shultz was hardly immune from being wrong. For example: Along with the rest of the State Department, he tried to talk Reagan out of using the line “Mr. Gorbachev, tear down this wall.” Shultz worried it was too provocative.

The cautionary tale is that many know Shultz from perhaps the biggest error in judgment he ever made, some 90 years into his life. That’s his association with Elizabeth Holmes, the Silicon Valley founder convicted of fraud in federal court. Shultz was one of Ms. Holmes’s first marks, and he helped her assemble a board for her blood-testing company from his Rolodex. Among the wreckage was Shultz’s relationship with his own grandson, Tyler, who early on discovered the company’s misrepresentations.

For the full review, see:

Kate Bachelder Odell. “BOOKSHELF; Subsume the Ego And Stay Loyal.” The Wall Street Journal (Tuesday, March 7, 2023): A13.

(Note: ellipses, and bracketed name, added.)

(Note: the online version of the review has the date March 6, 2023, and has the title “BOOKSHELF; ‘In the Nation’s Service’ Review: George Shultz’s Quiet Strength.”)

The book under review is:

Taubman, Philip. In the Nation’s Service: The Life and Times of George P. Shultz. Stanford, Cal.: Stanford University Press, 2023.

William F. Buckley, Sr. Spent $100,000 to Fund His Son’s Entrepreneurial Start-Up: National Review

In my Openness book, I give reasons why risky innovative start-ups at fragile early stages almost always need to be substantially self-funded. When close relatives invest, I include that as self-funding.

(p. A15) . . . “William F. Buckley Sr.: Witness to the Mexican Revolution, 1908-1922,” [is] a fascinating if uneven book by the independent historian John A. Adams Jr.

. . .

The business climate in Mexico was promising for foreigners like the Buckleys, thanks to the pro-development policies of its autocratic president, Porfirio Díaz, who would rule the country for more than three decades.

Buckley’s prominence among the American expatriate community made him a natural conduit between officials in the U.S. and Mexico once the latter country was plunged into chaos following the ouster of Díaz in 1911. Buckley was Zelig-like, cropping up repeatedly at key moments. He visited the U.S. Embassy in February 1913 during the Decena Tragíca (Ten Tragic Days), when Francisco Madero, Díaz’s successor, was overthrown in a coup led by Gen. Victoriano Huerta, instigating a spasm of violence that killed thousands in Mexico City.

. . .

Buckley favored Huerta, serving as the regime’s legal counsel in negotiations with the U.S. aimed at preventing hostilities between the two nations. He was thus dismayed by the ascendance of Venustiano Carranza and, later, Álvaro Obregón. Both leaders endorsed the Mexican Constitution of 1917, including Article 27, which asserted national ownership of natural resources while circumscribing the economic power of the church. These provisions horrified Buckley, who was a staunch believer in free-market capitalism as well as a devout Roman Catholic. In the bulletin of the American Association of Mexico, an advocacy group he founded in 1919, Buckley denounced the “dangerous Bolshevist movement” that had taken root in Mexico.

. . .

. . ., Mr. Adams consulted with several Buckley family members, including a descendant based in Mexico City, as well as Judge James L. Buckley, the sole survivor among the 10 children born to Will and his wife, Aloise. Judge Buckley, who recently celebrated his 100th birthday, contributed a foreword acknowledging the importance of Mexico to the family’s understanding of itself, writing that “it had somehow permeated our DNA.”

. . .

As another of his offspring once said, Buckley’s experience in Mexico “deepened his frontier suspicions of autocratic [leaders] (and big government in general), and this attitude dyes all his children strongly.” Surely that was true of Buckley’s favorite son, William F. Buckley Jr., who, after serving a short stint with the CIA in Mexico City (he, too, was fluent in Spanish), founded National Review in 1955, which remains one of the leading voices of the conservative movement. The elder Buckley helped fund his son’s upstart venture with a $100,000 contribution from a fortune that traced its origins to Mexico during the most tumultuous period of that nation’s history.

For the full review, see:

Andrew R. Graybill. “BOOKSHELF; Conservatism’s Mexican Roots.” The Wall Street Journal (Saturday, March 27, 2023): A15.

(Note: ellipses, and bracketed word, added.)

(Note: the online version of the review has the date March 26, 2023, and has the title “BOOKSHELF; ‘William F. Buckley Sr.’ Review: Conservatism’s Mexican Roots.”)

The book under review:

Adams, John A., Jr. William F. Buckley Sr.: Witness to the Mexican Revolution, 1908–1922. Norman, OK: University of Oklahoma Press, 2023.

Regulations, Trade Barriers, and “Restrictive Government Contracts” Caused Infant-Formula Crisis

(p. A15) The pandemic era has seen its share of supply-chain problems, but the infant-formula crisis—which began a year ago—stands out for its depth, duration and danger.

. . .

Politicians responded to the crisis with their standard pandemic playbook. They claimed decades of laissez-faire economics—free trade, deregulation, etc.—had left the U.S. formula market vulnerable to a major shock. Thus, the politicians argued, new government industrial policies and more regulatory enforcement were needed to resolve the current crisis and protect against future ones.

These refrains ignored the reality of the U.S. formula market and related federal policies, . . .

. . .

First, high and complicated “tariff rate quotas” dating back decades subjected most infant-formula imports to an effective tax of more than 25%; . . .

. . .

Two aspects of U.S. domestic policy added insult to this injury by effectively ensuring that a handful of large formula producers continue to dominate the market.

First, the U.S. regulates formula more strictly than any other food and more strictly than most other countries. Heavy regulatory burdens can discourage new market entrants, . . .

. . .

Second, the Special Supplemental Nutrition Assistance Program for Women, Infants, and Children, or WIC, which has grown to cover almost half of U.S. infant-formula sales each year, demands steep discounts from participating formula producers in exchange for sole access to a state’s WIC market and prime shelf space at participating retailers.

. . .

The combination of high trade barriers, onerous domestic regulations and restrictive government contracts has created a concentrated and sclerotic U.S. formula market that collapsed when a single factory shut down and still hasn’t fully recovered. Tellingly, the federal government’s emergency actions to alleviate the formula crisis targeted these very policies. Congress suspended baby-formula tariffs through the end of 2022. The FDA exercised its “enforcement discretion” to approve eight new foreign manufacturers to sell formula until 2025 without meeting all U.S. regulations. The Agriculture Department allowed WIC recipients to use their benefits to buy noncontract formula brands, including imports, until mid-2023. And President Biden’s Operation Fly Formula commissioned military aircraft to deliver formula from abroad.

In all cases, the federal government implicitly recognized how freer markets can boost economic resilience and how protectionism and excessive regulation undermine it. Yet Congress and the executive branch haven’t made these reforms permanent. Tariffs are now back in force, even as discrete shortages persist.

For the full commentary, see:

Scott Lincicome and Gabriella Beaumont-Smith. “The Infant-Formula Market Is Still Bottled Up.” The Wall Street Journal (Friday, Feb. 17, 2023): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date February 16, 2023, and has the same title as the print version.)

Flourishing Is the End, Profit Can Be a Means

Glen Hubbard has long been a thoughtful defender of entrepreneurial capitalisms. The article quoted below from The New York Times suggests that he is moving away from that. Is that true, or is The New York Times misrepresenting the development of Hubbard’s thoughts? I suspect the latter, but I have not kept up with Hubbard’s recent articles or lectures. Profits are a key means to enable human flourishing. The two are not inconsistent. Flourishing is the end, profit can be a means.

(p. C1) One zigs, the other zags. One teases the passer-by with bands of translucent glass wrapping a core of clear windows; the other, with floors angled in and out — a gentle architectural mambo. The pair of buildings that comprise Columbia University’s new business school, on its growing Manhattanville campus, exude a nervous off-kilter energy.

. . .

(p. C4) Glenn Hubbard, the former business school dean who brought the project to fruition, saw the need to break free from fealty to the unregulated free market economy that over decades has led to extraordinary wealth concentration. The idea that business should focus only on making money, attributed to the economist Milton Friedman, “was a simple and direct idea that took over business, banking, even corporate law,” Hubbard explained. “We are trying to come up with a framework that can be more about flourishing, not just profit.”

“The vision now is to bring people together and debate issues going on in the world,” said Costis Maglaras, who was on the faculty as the project was being designed and who succeeded Hubbard.

For the full story, see:

James S. Russell. “A Temple of Capitalism Opens Itself Up.” The New York Times (Saturday, January 7, 2023): C1 & C4.

(Note: ellipsis added.)

(Note: the online version of the story was updated Jan. 9, 2023, and has the title “At Columbia’s $600 Million Business School, Time to Rethink Capitalism.”)

Deregulating Entrepreneurship Enables Upward Mobility

(p. A15) I saw the power of entrepreneurship firsthand after co-founding the Home Depot. My experiences led me to believe that preserving and expanding entrepreneurship is the key to advancing racial and economic equality.

. . .

With almost no money, I had the idea to open a hardware store, a lumberyard and a garden store all in one. What began as a single store in Georgia grew to more than 2,000 locations nationwide and made me a billionaire in the process. Only in America could a member of an ethnic minority from a poor immigrant family write that kind of success story.

. . .

You can see the entrepreneurs driving around town in their trucks full of tools and material. Many of them are minorities. They don’t consider themselves victims of racial wealth or income gaps; they are actively overcoming economic disparities through work.

That isn’t happening only in building and landscaping. In almost every part of the economy, you’ll find entrepreneurial minorities breaking through difficult circumstances to achieve and live the American Dream. Accelerating this process is the key to bridging the country’s economic divides.

Unfortunately, government is moving in the wrong direction, erecting hurdles to entrepreneurship. My company wouldn’t have succeeded if it had started in today’s climate of regulations and taxes that disproportionately burden small businesses. The Home Depot almost went bankrupt several times in its first decade, and today’s policy environment would have tipped us into insolvency—as it does to countless entrepreneurs each year.

The biggest victims of bad government policy aren’t the elite; they will always be able to get into good schools and get their foot in the door of corporate America. The people hurt most by big government are those who lack advantages in becoming economically independent, often minorities.

For the full commentary, see:

Bernie Marcus. “Entrepreneurship Will Lift Minorities Up.” The Wall Street Journal (Tuesday, Jan. 10, 2023): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date January 9, 2023, and has the title “A History of Humanity in Cubits, Fathoms and Feet.”)

Marcus’s commentary is adapted from his foreword to this book:

Ortiz, Alfredo. The Real Race Revolutionaries: How Minority Entrepreneurship Can Overcome America’s Racial and Economic Divides. Conroe, TX: Defiance Press & Publishing, LLC, 2023.

Standardized Measurements Expedite Honest Exchange

(p. 20) Reading James Vincent’s quietly thrilling new book, “Beyond Measure: The Hidden History of Measurement From Cubits to Quantum Constants,” I began to think that one measure (so to speak) of the human experience might be the number of things we take for granted.

. . .

When people agree on a standard of measurement, they can coordinate their actions. You tell me that the sofa you’re selling is 72 inches wide, and from that bit of information I can see that it will fit in my living room.

. . .

Unlike, say, a simple act of thievery, which caused individual harm, metrological trickery could undermine the entire social order by sowing mistrust. “Measurement is a covenant that binds communities together,” Vincent writes. In addition to its obvious practical benefits — the ancient Egyptians couldn’t have built the Pyramids by eyeballing it — measurement has been embraced “for its ability to create a zone of shared expectations and rules.”

. . .

Metrology’s early history is marked by plurality — different units developing in different places, each one suited to a particular community’s needs. This variability allowed for flexibility, but it also allowed confusion and corruption to flourish. Vincent gives the example of France under the ancien régime, where the unit known as the pinte measured a measly 0.93 liters in Paris and a whopping 3.33 liters in Précy-sous-Thil. Elastic units were “exploited by the rich and powerful.” In exchanges with the peasantry, feudal lords used their authority over weights and measures to their own benefit.

Consequently, the metric system was a radical departure — the brainchild of the French Revolution’s savants, who promised to dispense with arbitrary units like the pied du Roi, or “the king’s foot,” in favor of weights and measures that were rational and impartial because they would be tethered to the Earth itself. A meter was standardized to one ten-millionth of the distance from the North Pole to the Equator. But even that definition turned out to be too “crass,” Vincent writes. Now the meter is defined in terms of something even more constant: the speed of light.

For the full review, see:

Jennifer Szalai. “Fathom That.” The New York Times Book Review (Sunday, December 4, 2022): 20.

(Note: ellipses added.)

(Note: the online version of the review was updated Nov. 21, 2022, and has the title “A History of Humanity in Cubits, Fathoms and Feet.”)

The book under review is:

Vincent, James. Beyond Measure: The Hidden History of Measurement from Cubits to Quantum Constants. New York: W. W. Norton & Company, 2022.