July 15 2010
Back to the Basics: The Moral Case for Free Markets
Carrie L. Lukas
In today's Wall Street Journal, Gregg Sherrill, chairman and CEO of Tenneco Inc., describes the rough road that American capitalism has just endured and why it's time to remind the public about the fundamental virtues of free markets.
The free enterprise system, hard-wired into this country's DNA, has created more wealth and lifted more people out of poverty than any other system ever devised by human beings. For the entire history of our nation, people from all over the world have come here for the opportunity to succeed on their own merits.
It would be a profound mistake to grow government's size in a way that would fundamentally shift its level of involvement in our overall economy. Other countries have tried this strategy in various ways, especially over the last century. The results have often been negative, and at times disastrous. None has come close to the levels of growth and individual prosperity driven by the American free enterprise system.
The truth is that when it comes to the things that define our society like energy, mobility and shelter, government can do nothing without the cooperation of business and industry. Nor, for that matter, can business function in this fiercely competitive global marketplace without the appropriate regulation and incentives that government can provide.
Expanded trade, competitive tax policies, a coherent energy policy, a realistic regulatory approach-it is in these areas that our government can most effectively ensure that we maintain our pre-eminent position in the world. At its best, government is the guarantor of our freedom to create, to lead and to innovate....
I'm proud to be part of an economic system that still offers the greatest opportunity for individual prosperity and quality of life. I believe my colleagues in all segments of American business and industry share that pride. It's time we find our voices and speak up. We have a powerful story to tell.
This last point seems particularly important. For too long, the media and political class has made it seem as though business is a dirty word. Think of every graduation speech you've heard or read - they almost inevitably urge new grads to "give back" and perform some kind of community service. But what service could be better today than to go out and start a profit-making enterprise that creates jobs and lowers costs for American families?
It should go without saying, but unfortunately it needs to be said: we need business. We need businesses, big and small, to create the goods and services we use and to help us exchange our talents with others.
Yes, we need jobs, but it's important to boil that down further. Government can create jobs - many of which are no more useful than paying someone to rake a pile of leaves and then spread them back around. That's a job, but it isn't useful in anyway to our society. In fact, government jobs are often even worse than useless because people are paid to make it harder for others to engage in productive economic activity.
Yet the reason "jobs" are important is because they allow us to use our talents and provide a valuable service for someone else. Sometimes it's obvious what that exchange is: I pay someone at a fruit stand for a bag of apples. But often time it's more complicated than that. Many skills don't easily translate into that kind of one-on-one exchange and it's easier when someone forms a larger enterprise-a business-and then looks for people with the skills that are needed to service customers. Businesses facilitate those exchanges and we should be grateful that they do so.
It seems strange to have to try to explain the value of business, or even the fundamental concept of a "job" but Sherrill is right: in this political environment, it's important to get back to the basics and contemplate how our system really works and how we benefit from it.