9. A Better Way

When was the last time you went to the grocery store and stood in awe at just how truly amazing these modern marvels are? Meats, breads, fruits, cheeses, and green things—eh, I mean vegetables—as far as the eye can see. And the Twinkies—oh, the Twinkies. You can buy dozens of them for less than 10 bucks. Grocery stores really are remarkable places.

Okay, you’re probably thinking I’ve lost it, but don’t close the book just yet. Really think about it. One hundred years ago, many homes still didn’t have electricity or cars or refrigerators. If you wanted to store food, you needed to pay an “ice man” to come to your home to literally chip off a block of ice that could keep a small batch of produce cool. Televisions didn’t exist, and neither did computers. It was common for people to die at birth, and many died from diseases that essentially no longer exist in the United States. Something as simple as the flu could wipe out millions in a single year. The Spanish flu of 1918 infected half-a-billion people worldwide, and it killed more than 675,000 Americans.²

INFECTIOUS DISEASE IS THE ONE THING THAT CAN COMPETE WITH THE DEATH COUNT OF SOCIALISM. BUT, GIVE THE SOCIALISTS A LITTLE TIME. THIS RACE ISN’T OVER YET!

Today, people are healthier, wealthier, happier, and safer than they have ever been before. Americans generally live long lives, even those without much wealth, and high-quality, affordable food is available in every town in the country.

Man went from the farm and fire, to supermarkets and space travel in less than 200 years. Why? What happened?

At almost any other time in human history, going back for thousands of years, a store comparable to your run-of-the-mill modern grocery store would have been considered a wonder of the world. Sure, markets existed in ancient times, and in some important cities, you could buy products from hundreds of miles away, but they were nothing like our modern grocery stores, where you can buy in a single trip apples from Washington State, oranges from Brazil, prosciutto from Italy, chocolate from Belgium, cheese from Wisconsin, cereal from Mexico, coffee from Colombia, and milk from a nearby dairy— now some believe this is a bad thing due to carbon emissions etc., but before we throw the baby out with the bathwater, let’s realize what it means to the health and welfare of the entire world to destroy the very system that man has never seen before and has saved the lives of hundreds of millions of people.

And when you shop, you probably do so wearing clothes made from all over the world, too—a baseball cap from Bangladesh, a shirt produced in Indonesia, and jeans made in Turkey. As you walk through the grocery store, you’ll see signs crafted by artists in New York City, televisions designed in Japan, and you’ll always be able to shop in comfort, thanks to modern air-conditioning and heating systems. When you purchase items, you’ll be able to pay for your entire order using a single plastic card, which will transmit financial data near-instantaneously and automatically to your bank, so that you’ll know down to the penny how much money you have available to spend.

Many of us then drive home in a car that may also have been made on the other side of the world and listen the whole ride home to an audiobook purchased while waiting in the checkout line with a supercomputer smartphone. (Maybe you’re even listening to the audio version of this book on the way home from the store now.)

For thousands of years, people couldn’t even begin to fathom something as remarkable as a modern trip to the grocery store. But today, these wonders are ubiquitous. Americans don’t stand in awe at grocery stores anymore. In fact, they often treat going to them as though it were a tedious chore. Many of us—myself included—don’t take nearly enough time in our daily lives to stop and realize just how incredible our world is, nor do we take the time to think about how we got here. How is it that it took thousands of years for humans to produce these luxuries? Why is it that we develop more technological innovations in just one month in modern times than we did in whole centuries in the past? Were humans in the ancient world just plain stupid?

Although humans’ technological achievements progressively increased over many millennia, the pace of that development has rapidly risen over the past 500 years, and especially in the past two centuries. And there’s one thing that occurred during that period that sets it apart from every other period in human history: individual freedom. Once people were free to own their own property, open new businesses in relatively free markets, and speak, write, associate, and worship freely, the world began to dramatically progress in ways that it never had before.

This isn’t a coincidence. Prior to the Enlightenment and creation of the New World, economies were often centrally planned and subject to the whims of a monarch, emperor, or military despot. People generally lived and died within a single, relatively small geographic area, often where they were born. Cultures, ideas, and innovations were typically slow to travel as a result. People had little reason or resources to leave their homes, and ruling classes kept lower classes from becoming too wealthy or powerful. People didn’t bother innovating, except in their own personal lives, because the rewards for doing so were often confiscated by someone else. And when people weren’t dying from disease or the elements, they were often fighting in some king’s war or battling foreign invaders.

The development of personal liberty, the rule of law, and property rights created unprecedented opportunities. For the first time, people could pursue their passions and compete with others in relatively open marketplaces. The best ideas flourished, and the worst were quickly swept away. Only those who continuously innovated and were willing to work hard thrived, weeding out many outdated ideas.

With the birth of America, humans enjoyed even greater individual liberties and property rights, and talented people from around the world flocked to its shores—from China, Ireland, Italy, Germany, and many other nations—to enjoy the economic and personal freedoms generations before them could have only dreamed of. Freedom built our marvelous modern world by rewarding innovators and allowing people to live without fear of being punished for their religious views or political philosophies, among other things.

That’s not to say there weren’t mistakes made along the way, including some incredibly tragic errors. It would take more than a half-century after the birth of America for slavery to be completely abolished, and many decades more before African Americans, women, and other groups would enjoy the full range of liberties others previously had benefited from. But once liberty was fully granted to all people, innovation and wealth in the United States increased even more quickly.

THOUGHT EXPERIMENT…

Imagine being in the 1960s. Girls are screaming for the Beatles, TVs are still mostly black and white, and computers are the size of rooms. Now imagine the government deciding it wants to set upon a mission to create powerful supercomputers so small they can fit in your pocket, and they want enough for everyone. Also, they want to accomplish this within 50 years.

A politician would be laughed out of office, and rightfully so. Based on examples of government’s failures presented earlier in this book, this hypothetical government mission would probably end up with the cell phone equivalent of the Trabant (if you don’t know what a Trabant is, “google it” on your pocket-sized supercomputer).

But that impossible mission was accomplished by the free market.

Today, smartphones have more computing capabilities than the entirety of NASA did when it sent the first men to the moon in 1969. Modern smartphones are simultaneously supercomputers, high definition cameras, GPS devices, translators, TVs, and gaming systems, and provide countless other services. Oh, yeah, and they still make phone calls. And on top of all that, they are relatively cheap enough for most people to obtain without breaking the bank.

A FREER, RICHER WORLD

Throughout much of the Western world, those of us who believe in the power of free markets have been told for decades that our ideas were once meaningful but have since been replaced with better, more enlightened ideas about how to order society. We’ve been told that freedom is an outdated, quaint notion, one that’s holding the world back from reaching its full potential. “If only you were willing to give away your freedom,” we’ve been told, “to an army of well-educated, highly skilled bureaucrats, you’d have better lives and all of the world’s ills could be cured.”

But if history has taught us anything over the past century, it’s this: More freedom equals wealthier, healthier, and safer communities, and the more centralized power becomes in society, the greater the tragedies that inevitably follow. This formula isn’t merely based on the experience of one or two nations, but rather the entire world. And it isn’t an idea that has only proven to be true in some distant period in history, but rather throughout all of history, including the modern age.

Almost nightly, at cocktail parties in cities like Los Angeles, New York, and San Francisco, socialists talk about how they’re so worldly and how ignorant Americans are in the Heartland when it comes to the so-called achievements of the rest of the world. “If only those deplorables would spend more time reading The New Yorker and less time riding around on their tractors, they’d see how fabulously central planning works.”

But if the “enlightened” Left spent more time looking at hard data and less time reading left-wing echo chambers like The New Yorker, they’d know that recent history has perhaps revealed the power of free-market economics better than any other time in history. While the Left has spent the past few decades trying to push America toward socialism, much of the rest of the world has been running in the opposite direction. And those that haven’t—places like North Korea and Venezuela—have become, well, hellholes.

Take India, for example. As late as the 1980s, India was still trying (and failing) to find ways to make socialism work. Indian central planners knew they had access to tremendous natural resources and labor, but they couldn’t find an effective strategy that would keep the nation’s markets, wealth, and property tightly controlled while also spurring economic growth. India was rapidly falling behind the rest of the world.

As Reason’s Sam Staley notes, “India became the poster child for post–World War II socialism in the Third World. Steel, mining, machine tools, water, telecommunications, insurance, and electrical plants, among other industries, were effectively nationalized in the mid-1950s as the Indian government seized the commanding heights of the economy.”³

The results were disastrous. “Manufacturing never took off,” Staley explained, “and the economy meandered; India lagged behind all its trade-embracing contempo-raries. Between 1950 and 1973, Japan’s economy grew 10 times faster than India’s. South Korea’s economy grew five times faster. India’s economy crawled along at 2 percent per year between 1973 and 1987, while China’s growth leapt to 8 percent and began matching rates for Hong Kong, Taiwan, and other Asian tigers. Even as that reality became clear as early as the late 1960s and early 1970s, India’s policy makers refused to give up on economic planning.”

As a result of this failure, by 1993 more than 430 million Indians were living below the international poverty line.⁴ That’s 100 million more people than the current population of the United States.

But then everything changed. In the early 1990s, India started to open its markets to foreign investment and stopped fixing its exchange rate. It chose not to impose the same burdensome regulations on the new and growing technology sector as it had in other industries. It eventually privatized some state-owned businesses and reduced regulations. With these additional freedoms came prosperity. India’s gross domestic product grew (in current U.S. dollars) from $279 billion in 1993 to $2.72 trillion in 2018, an increase of 874 percent. Over the same period, Germany’s GDP increased by just 94 percent.⁵

In his book The Conservative Heart, Arthur Brooks, the president of the American Enterprise Institute, explains that thanks to India’s free-market reforms, India “is simply not the same country as it was in 1983,” when socialist policies continued to hold the country back. Brooks notes, “In the past twenty years, poverty in India has been cut by more than half, as free enterprise has pulled some 200 million people out of poverty. Between 1965 and 1975, per capita income in India rose by just 0.3 percent annually. But from 2005 to 2013, that figure more than doubled, from $740 to $1,570. If India continues growing at these rates, it will cease to be a poor country in the next few decades.”⁶

China has also experienced rapid economic growth since deciding a few decades ago to liberalize certain parts of its economy. This decision can be traced back to 1978, when Chinese officials traveled across the world to learn from the achievements of other nations. Rainer Zitelmann, Ph.D., the author of The Power of Capitalism, notes, “Chinese delegations made over 20 trips to more than 50 countries including Japan, Thailand, Malaysia, Singapore, the United States, Canada, France, Germany and Switzerland,” and what they found astounded them. After decades behind the “Bamboo Curtain,” the Chinese saw the significant economic gains made by countries throughout the world, including many Asian nations long thought by the Chinese to be inferior. In particular, they were interested in the advancements made by Singapore.

At a meeting in 1978, former Singaporean prime minister Lee Kuan Yew told Chinese communist leader Deng Xiaoping that the success they were starting to experience in Singapore could be achieved throughout China, if the country were willing to open its markets and increase private property rights. According to the South China Morning Post, Lee reminded Deng “that the Singapore Chinese were descendants of illiterate landless peasants from Guangdong and Fujian,”⁷ but now, those same Singaporeans were more successful and wealthy than many of those more educated families still living in China.

According to Lee’s memoirs, Lee told Deng, “There was nothing that Singapore had done which China could not do, and do better.” Lee then recalls that Deng “stayed silent,” but over the next decade, Deng started to dramatically reform the country in line with some of the reforms suggested by Lee, and even “told the Chinese people to do better than Singapore.” When that happened, Lee says he “knew [Deng] had taken up the challenge I quietly tossed to him that night 14 years earlier.”

As I noted way back in Chapter 2, in the early 1980s, China responded to this challenge by decollectivizing its agricultural system and forming “Special Economic Areas” that allowed the Chinese to experiment with market-based reforms. As a result of the success of these experiments, the Chinese transitioned the country to its current model, one in which private property ownership is tolerated and markets are much freer than they have been since the Communist Party rose to power in the early twentieth century.

The effects of these reforms, as imperfect as they are, have been nothing short of astounding. From 1960 to 1990, China’s GDP increased by about 500 percent ($300 billion), and from 1990 to 2018, China’s GDP grew by $13.2 trillion, a 3,680 percent increase.⁸

That’s not to say China and India have totally adopted free-market principles or that either nation has rid itself of poverty; they’ve done neither, in fact. As the Heritage Foundation wrote in a 2019 report, “China remains ‘mostly unfree.’ Nontransparent state-owned enterprises dominate the financial sector and many basic industries. The official ideology of ‘Socialism with Chinese Characteristics’ has chilled liberalization, heightened reliance on mercantilism, raised bureaucratic hurdles to trade and investment, weakened the rule of law, and strengthened resistance from vested interests that impede more dynamic economic development.”⁹

HONG KONG AND CHINA’S “THIRD WAY”

Some have pointed to China’s economic success as proof that there can be a “Third Way” to manage economies, a blend of limited private property ownership and socialist central planning and reduced individual freedom. But the Chinese need not look further than their own shores to find ironclad proof of why their top-down, heavily regulated, limited liberty model doesn’t work nearly as well as those models that feature much freer markets.

Hong Kong—which had been under British control for 156 years—continues to have one of the freest and most successful economies in the world, thanks to a special agreement that has allowed it to operate with economic autonomy since rejoining China in 1997. According to reports by the Heritage Foundation, Cato Institute, and Fraser Institute, Hong Kong ranks first among all nations for its economic freedom.^10,11 Citizens of Hong Kong enjoy strong property rights protections, a very small regulatory burden, and many civil liberties protections. The income tax burden is also low, and the tax system is extremely efficient. Individuals only pay 15 percent of their income in taxes, and the top corporate rate is just 16.5 percent.¹²

Hong Kong’s free-market policies have made its economy the envy of the world and have allowed it to far surpass the achievements gained in China. As I mentioned previously, since 1960, China has experienced remarkable economic growth. Its per-capita GDP has risen significantly, thanks in large part to the free-market reforms enacted in the 1990s and 2000s. But even with this growth and the huge demographic advantages China enjoys over Hong Kong, Hong Kong has substantially expanded its economic advantage over China. Since 1960, Hong Kong’s per-capita GDP has risen from $429 to $48,717, an increase of 11,255 percent. Today, the per-capita GDP in Hong Kong is $38,947 more than it is in China. In 1960, the gap was just $340.¹³

Hong Kong’s economic miracle hasn’t been a mistake or a mere coincidence, and neither have similar economic booms experienced in places like Singapore. They are the direct result of free-market reforms, including increased property rights protections. And the growth experienced in nations formally dominated by strict socialist policies, like China and India, serves as a clear example of the power of economic freedom and individual choice. Even modest free-market reforms in those nations have liberated hundreds of millions of people from extreme poverty.

CAPITALISM IS FOR DREAMERS

In the eighteenth century, few saw the potential of the United States. The kings, emperors, and aristocrats of Europe thought little of roughneck Americans on the other side of the world, and why would they? After all, Americans didn’t have lavish palaces or a storied history—at least, not compared to the centuries-old monarchies of the Old World. Much of the United States was, as it is now, composed of immigrants or the children or grandchildren of immigrants. We had very different religious beliefs and, in many respects, cultures—and that was considered by many to be a weakness. A nation that didn’t share a uniform culture, religion, and governing structure was thought to be unsustainable and potentially vulnerable to foreign invasion.

But whatever disadvantages—real or imagined—the United States suffered from in its earliest days were more than made up for by Americans’ devotion to the promise that “all men are created equal” and “endowed by their Creator with certain unalienable rights.” Freedom in all aspects of life—personal, economic, and spiritual—drew millions of people, from every corner of the Earth, to the United States’ “New World.” And while they may not have had identical religious beliefs, personal ambitions, or a common ethnic heritage, they all shared in the same foundational idea that people freed from the shackles of an all-powerful, centralized ruling class could do amazing things, and that the world is a better place when people have the liberty to pursue their own unique passions, rather than have them imposed on them. For two centuries, America flourished because of liberty, not in spite it. And as a result, the United States is now the world’s most powerful nation, even though it contains only a small fraction of the global population.

Free markets, coupled with constitutional rights and a representative republican government, are at the heart of America’s success. Without free markets, the United States wouldn’t be the economic juggernaut it is today. Its people wouldn’t enjoy one of the highest living standards in the world, and they wouldn’t have the highest disposable incomes, either.¹⁴ They wouldn’t have the world’s most technologically advanced workforce or medical system. They wouldn’t have been able to rid the country of countless diseases that have plagued mankind for centuries, and the United States wouldn’t be the home to many of the world’s most important and innovative businesses and scientists.

Without free markets, Americans wouldn’t have been able to liberate Europe from Nazi Germany or save millions of people around the world from infectious diseases. They wouldn’t have been able to win the Cold War and force the Soviets to withdraw from Eastern Europe, and they wouldn’t have been able to serve as a home to countless refugees escaping tyranny from around the world. Without America’s market economy, millions of additional people in countries in Africa, Asia, Europe, and South America would be living in poverty.

FOR A GREAT RESOURCE OF ALL OF THE INCREDIBLE THINGS FREE MARKETS HAVE ACHIEVED, READ ADDICTED TO OUTRAGE BY GLENN BECK. THAT’S RIGHT, I’M SELLING YOU MY OWN BOOK INSIDE MY BOOK THAT YOU JUST BOUGHT. CAPITALISM AT WORK.

– GLENN :)

Without free enterprise, Americans wouldn’t have been able to build the internet—the world’s greatest example of the success of the free market. Virtually everyone—even socialists—agrees the internet is one of the modern world’s most powerful marketplaces and sources of information, and the fact that it has largely been left alone by the world’s army of regulators that have screwed up so many other parts of the global economy is a big reason why the internet remains so successful. Every day on the internet, countless thousands of businesses, news outlets, niche websites, and cooking blogs compete with one another, driving unprecedented innovation. The best ideas thrive, and the worst fade away. It’s arguably the most efficient, freest marketplace in human history, and as a result, it’s wildly successful. That’s not a coincidence, it’s free-market principles at work.

And when you are reflecting on the amazing innovations brought on by the internet and countless other game-changing inventions, think about what is in store for us in the next few decades. It is increasingly likely that the average person won’t even have to travel to the grocery store. Packages containing any good you can image will be dropped off at your doorstep by automated drones, without you even having to physically order them. Within the next couple of decades, we’ll have fleets of self-driving cars take us to any destination we desire at a level of comfort and safety far beyond what we experience today. And we cannot even fathom how artificial intelligence will revolutionize our entire world, especially the health care field. We are just now figuring out how to use AI to sift through unlimited amounts of medical data to develop diagnoses with better accuracy than the best medical experts ever could. With free markets driving innovation, the potential for human progress is quite literally unlimited.

A capitalist system that depends on truly free markets isn’t merely one economic option out of several a free society could embrace, it is the only option for a liberated people. Any form of collective decision-making stifles diversity; it doesn’t enhance it, because collective systems like socialism empower the majority to impose its will on minority groups of every kind. As Ayn Rand correctly recognized, “The smallest minority on Earth is the individual,” and the individual is always deprived of its essential freedoms under a socialist model.

The image so many Americans now have of capitalism is one of corruption, backroom deals, and cronyism. But this isn’t what I mean when I talk about the benefits of free markets. Crony capitalism is a funhouse-mirror distortion of capitalism, and it can only exist in a society in which government has been given far too much power. The last thing we should do to “fix” the problems pervasive in our current system is to give even more power to those who have worked so hard and so effectively to screw it up in the first place.

I understand why so many people find socialism to be an appealing option. They look around at the systems in place throughout the United States today and think, “This can’t be the best we can do.” They face ever-rising health care costs, send their kids to failing schools, pay outrageously high student loan bills, and watch as one promise after another made by politicians is broken. They know the economy isn’t working for everyone, and they’re right. Then they hear politicians, activists, academics, Hollywood celebrities, and even businesspeople who sound sincere say that free markets are the problem, that the existence of markets is the reason people are suffering. But there simply is no truth to these claims, as I’ve shown throughout this book.

Socialists also criticize free markets because they recognize that when people are free to make choices, some people make poor decisions. Some even suffer immensely because of them. In every free society on Earth, there are people struggling. Some are workaholics. Some are greedy. Some have substance abuse problems. Many are addicted to materialism. And it’s not hard to find these problems in the United States, where consumerism has in many ways become a new religion.

No one understands these issues better than I do. When I was in my 30s, I had a highly successful and lucrative career—money, cars, and the latest and greatest television. And I spent most of my time chasing even more wealth and success, and boy, was I great at it. But here’s the thing, I was miserable. On the surface, to many, my life looked near to perfection, but beneath the surface, my life was falling apart. In one sense, I was benefiting immensely from free markets. But in another sense, the materialism that had taken hold of my life was making it increasingly more difficult to do the things I knew in my heart were necessary to become a better person.

Free markets aren’t good or bad. They don’t cause problems. People, acting freely within those markets, create problems. Capitalism in a free society is merely a highly efficient vehicle for achieving whatever desires are in man’s heart. Perhaps the internet is the best illustration of this. On the internet, you can find virtually anything you want. You can discover important truths from the past, develop a new breakthrough product or service, organize thousands or even millions of people to engage in a positive like-minded cause, or provide people with ideas or products that they simply can’t get anywhere else.

But the internet can also be used to tear others down, gossip, harass, intimidate, lie, and steal. Some use the internet to feed their addiction to materialism or pornography. The internet can be used for any number of destructive, hateful, or even violent purposes.

So, is the internet good or bad? The truth is, it’s neither. Like every market, the actions that occur within it are merely the reflections of the people in the market. If those within a free society are using their freedom to hurt others, it’s not freedom that’s the problem, it’s the people. Socialists understand that people are flawed, but they think they can overcome those flaws by empowering the collective. Does this make sense? Why would 300 million flawed people be better equipped to manage the affairs of your own household, of people they know nothing about and have never met?

If you want to fix the many problems facing the world—and I have no doubt that if you’ve read this far into this book, you do—then the best thing you can do is to reform your own heart and be a force for good in the lives of those around you. If you think for even one moment that building yet another gigantic government social program is going to accomplish that, you’re going to live the rest of your life in extreme disappointment.

Happiness comes from serving others, not serving yourself or forcing others to serve you. That’s a lesson that took me many years to learn, but it’s one that has allowed me to rebuild my life and fill those voids in my own heart that I tried foolishly for years to fill with material wealth and success.

When socialists encounter a problem, they simply ask, “How can I force people to act the way I think they should?” Entrepreneurs and small business owners, on the other hand, see the world as it is and ask, “How can I make a product or service so effective and inventive that others will desperately want to voluntarily buy it?” Socialism is an ideology of manipulation, control, and force. It can’t function without coercion. On the other hand, capitalism—a truly free-market system, not corrupt, crony capitalism—isn’t, as so many socialists say, a system built on greed or hate or racism or corporatism. Free-market capitalism is for hard workers, entrepreneurs, planners, thinkers, freedom fighters, inventors, and, most importantly, dreamers.

Some Americans wrongly think that conservatives want to keep things as they are, but that’s not what we’re hoping to “conserve.” We’re not foolishly working to keep the world trapped in a time capsule, but rather to maintain and even enhance our freedoms so that we can radically change the world for the better. We’re not opposed to progress. Quite the contrary, in fact; we’re hopelessly obsessed with progress, which is why we’re so opposed to government’s tireless efforts to stop or slow innovation in the name of “social justice.” There is nothing good for society that comes from stunting economic growth and nothing “just” about tyranny.

If you’re a socialist, maybe you’ve read through this book and remain skeptical of the benefits of free markets and the dangers of socialism. Good. Question everything you’ve read here and everything you’ve heard elsewhere with boldness, and do your own homework. Don’t take my word for it, or anyone else’s for that matter. All that I ask is that you continue to pursue the truth in all things, but especially on the question of socialism. If you do, you’ll find we have more in common than you might think—or want to admit.

FREE MARKETS = FREE PEOPLE + PROSPERITY

A FREER, RICHER WORLD

HONG KONG AND CHINA’S “THIRD WAY”

CAPITALISM IS FOR DREAMERS