Wednesday

The Freedom to Fail.


I have decided to take some time to cover the 28 principles outlined in W. Cleon Skousen’s book “The 5000 Year Leap”. The founders believed these principles to be necessary to establish and maintain the form of government that has made this country the greatest bastion of freedom in the world. In each post we will dissect one of the principles and apply it to problems faced by our country. I hope you will take the time to read “The 5000 Year Leap” and accompany me on this journey of exploration.

The fifteenth principle: The highest level of prosperity occurs when there is a free-market economy and a minimum of government regulations

Oh how far have we drifted from the intent of the founders…?

The United States was the first to try structuring an entire national economy on natural law and Adam Smith’s free-market concept. The concept called for the following:

Specialized production – let each person or corporation of persons do what they do best.

With the stifling government regulations and intervention as of late this no longer seems to the rule of the day.

Exchange of goods takes place in a free-market environment without governmental interference in production, prices or wages.

With minimum wages laws, burdensome unemployment compensation requirements, taxes, environmental regulations, and other draconian legislation it seems as if the free market is a thing of the past.

The free market provides the needs of the people on the basis of supply and demand, with no government imposed monopolies.

With the government takeover of GM, Chrysler and a large sector of the banking industry this concept has also seemingly fallen by the wayside.

Prices are regulated by competition on the basis of supply and demand.

Profits are looked upon as the means by which production of goods and services is made worthwhile.

In our burgeoning new world order profits are now viewed as evil and predatory. Companies that make profits are viewed as a scourge on society and treated with contempt. What has happened to the free market that made this country a superpower?

Competition is looked upon as the means by which quality is improved, quantity is increased, and prices are reduced.

No longer is this true. Competition has been replaced by government intervention and regulation. When business models prove unsuccessful they are not allowed to fail but instead propped up by government meddling. Competition is also viewed as evil as it produces winners and losers. Losing seems to be a foreign concept in the America of today.

The four laws of economic freedom:

The freedom to try.

The freedom to buy.

The freedom to sell.

The freedom to fail.

As I have already mentioned the freedom to fail has been removed by well-intentioned government meddling. By doing so the have removed one of the legs of the equation and rendered the entire structure unstable.

The government has exceeded the role envisioned for it by the founding fathers. They have interjected government control into aspects of the free market that have rendered it anything but free. The founders envisioned a very limited role for government in the market and it was limited to preventing the following:

Illegal Force in the market place to compel purchase or sale of products.

Fraud in misrepresenting the quality, location, or ownership of the item
being sold or bought.

Monopoly which eliminates competition and results in restraint of trade.

Debauchery of the cultural standards and moral fiber of society by commercial exploitation of vice – pornography, obscenity, drugs, liquor, prostitution or commercial gambling.

Perhaps Washington’s sentiments capture the essence of the founder’s ideals regarding government intervention in the market:

Let vigorous measures be adopted; not to limit the prices of articles, for this I believe is inconsistent with the very nature of things, and impracticable in itself, but to punish speculators, forestallers, and extortioners, and above all to sink the money by heavy taxes. To promote public and private economy; encourage manufacturers, ect.

Where we are failing in the free market is in adequately limiting government intervention. We are in fact seeing an ever increasing role of government in the private sector. With the government takeover of banks and auto manufacturers the government is infiltrating the very essence of the free market.

The freedom to fail is no longer recognized. Businesses that have proven themselves unable to survive are no longer allowed to fail, restructure, and rise from the ashes in a new and stronger incarnation. They are simply subsidized by taxpayer dollars in an effort to forestall the inevitable.

We have abandoned the principles of the free market as envisioned by the founders for nothing less than socialism. With each passing day we slip a little further from the successful experiment that is America into the failed realm of socialism.





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