Tuesday, January 12, 2010

15. The Highest Level of Prosperity Occurs when there is a Free-market Economy and a Minimum of Government Regulations.

Adam Smith’s “The Wealth of Nations” was published in 1776. It fit the thinking of the Founders.

They embraced capitalism. Free markets were good precisely because they allowed people the freedom to try, to buy, to sell, and to fail. Government should not intervene in the economic affairs of private business and the buying public.

UPDATE 1/25/2010:
David Brooks has an opinion piece in the New York Times that seems to embrace the point.  Here are three key paragraphs:
In fact, this country was built by anti-populists. It was built by people like Alexander Hamilton and Abraham Lincoln who rejected the idea that the national economy is fundamentally divided along class lines. They rejected the zero-sum mentality that is at the heart of populism, the belief that economics is a struggle over finite spoils. Instead, they believed in a united national economy — one interlocking system of labor, trade and investment.

Hamilton championed capital markets and Lincoln championed banks, not because they loved traders and bankers. They did it because they knew a vibrant capitalist economy would maximize opportunity for poor boys like themselves. They were willing to tolerate the excesses of traders because they understood that no institution is more likely to channel opportunity to new groups and new people than vigorous financial markets.

In their view, government’s role was not to side with one faction or to wage class war. It was to rouse the energy and industry of people at all levels. It was to enhance competition and make it fair — to make sure that no group, high or low, is able to erect barriers that would deprive Americans of an open field and a fair chance. Theirs was a philosophy that celebrated development, mobility and work, wherever those things might be generated.
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