Why does the government keep growing, why should we be concerned about it, and what to do about it? “Free Market Revolution” by Yaron Brook, Executive Director, and Don Watkins, a fellow at the Ayn Rand Institute answers these questions in lucid, lively prose, peppered with several concrete examples from business and politics. If you have ever pondered these questions or been alarmed by the continuing economic recession, the skyrocketing deficit, and the debt crisis in the United States—$16 trillion and counting—I urge you to read this book. It astutely describes the current economic, political, and moral mess of America—and offers a way out of it.
Brook and Watkins start by describing today’s economic situation and the ever-growing government. They diagnose the morality of altruism as the cause. The advocates of big government argue that government is needed 1) to regulate the greedy profit seekers who otherwise would trample over dead bodies to maximize profits and 2) to provide for important needs through a variety of entitlements such as “unemployment benefits, disability benefits, income subsidies, food stamps, Social Security, Medicare, Medicaid, housing subsidies, and public education.” Altruism holds that a need is a claim and those who are productive should be less greedy and sacrifice for the needy. And because both political parties subscribe to this morality, the government keeps growing. A radical change in morality is needed as a solution to today’s crisis, argue Brook and Watkins.
This is where Ayn Rand’s ideas come in. She proposed a moral code radically different from altruism, based on rational selfishness. Brook and Watkins contrast Rand’s rational selfishness to the conventional view of selfishness as cynical exploitation and show how people’s pursuit of self-interest works to everyone’s benefit. They defend businessmen as producers and traders who through profit motive and free markets (to the extent the markets are free) have created tremendous wealth that has benefit everyone.
Besides outlining the rational egoist alternative to altruism and cynical exploitation and defending businesspeople and the profit motive, Free Market Revolution provides a primer on the functioning of a free market. It explains how the division of labor, the price mechanism, and competition— fueled by the profit motive—lead to efficiencies, innovation, and wealth creation, but also how government intervention undermines all those benefits.
Brook and Watkins show how the regulatory state, while claiming to protect consumers and workers, fails to do so and punishes producers. By permitting the government to control the “greed” of businessmen to exploit us, we give arbitrary power to politicians to redistribute our income based on their assessment of the needs of others. However, government regulation of business is not needed (protection of individual rights to life, liberty, property, and the pursuit of happiness is sufficient), because it is not in the self-interest of businesspeople to exploit others. Quite the contrary, voluntary trade and profit seeking works for everyone’s mutual benefit.
None the arguments put forward by Brook and Watkins are merely abstract, hypothetical claims. Everything is backed up by examples, both historical and current, of the impact of economic freedom on productivity, innovation, and wealth creation, ranging from Andrew Carnegie to Thomas Edison to John D. Rockefeller and Standard Oil to Steve Jobs and Apple, Wal-Mart, and the online shoe retailer Zappos. Equally illuminating, although not as inspiring, are the negative examples of government intervention in the economy and its consequences, such as the list of more than a hundred government regulatory agencies and programs and the numerous pieces of legislation, from Dodd-Frank Wall Street Reform and Consumer Protection Act to Obamacare.
Finally, Free Market Revolution argues that the entitlement state that takes from those who are productive and gives to those who are not is immoral because it undermines the freedom of the productive (and fails to meet the ever-growing demand for “free” services and the ever-expanding ranks of the needy). The final example is the inefficient, expensive government controlled health care system in the United States, contrasted with the health care system in a free market.
The government keeps growing because the majority of people have accepted the altruistic argument for controlling “greed” to meet needs. We should be concerned, because the encroaching regulatory state undermines our freedom to pursue our self-interest and happiness and is pushing us steadily towards an economic disaster. We can stop this development by rejecting the morality of altruism and embracing rational egoism as proposed by Ayn Rand. As the first step, I recommend reading Free Market Revolution. It will provide you an understanding of the current situation and intellectual ammunition for the fight.
Latest posts by Jaana Woiceshyn (see all)
- No Need to Boycott Amazon.com - 2015.08.30
- Happiness of Work - 2015.08.09
- Business Hero: Resolute Forest Products CEO Richard Garneau - 2015.08.06
- Pragmatism is Impractical in the Long Run - 2015.07.20
- The Causes of the Greek Economic Tragedy—and the Capitalist Cure - 2015.07.16