Happy Birthday Walter Williams
Today marks the 75th birthday of one of the greatest champions of liberty in American history, Walter E. Williams. Like his good friend the late Milton Friedman, Williams is a brilliant economist who specializes in making economics understandable to the layperson. The John M. Olin Distinguished Professor of Economics at George Mason University in Fairfax, Virginia, Williams has long been an adjunct scholar at Cato. He is the author of nine books, one of which, South Africa’s War Against Capitalism, Cato published in 1989. No sooner did Williams publish his autobiography this year, Up from the Projects, than he published a terrific new book, out this month, Race & Economics: How much can be blamed on discrimination? Like many Cato scholars, he is a member of the Mont Pelerin Society.
On issues ranging from deregulation of the economy to legalizing drugs, Walter Williams is a passionate, laissez-faire libertarian. His libertarianism greatly improves The Rush Limbaugh Show where he is a frequent guest host. Williams rubs elbows with the movers and shakers in America, being a member in good standing of the secretive Bohemian Grove. Even more secretive is his participation in the influential, Washington, D.C.-based Politically Incorrect Boys Club among whose members are included Cato’s Beloved Founder Ed Crane, and senior fellows Richard Rahn and Dan Mitchell.
All of us at Cato wish our dear friend Walter a very Happy Birthday!
Entrepreneurship for Good
At last week’s Mont Pelerin Society meeting in Stockholm, Deirdre McCloskey argued that it was important for society to affirm entrepreneurship. How right she is.
The economic benefits of the new technologies and processes constantly created by people with new economic ideas is obvious. But the social benefits of such inventions also are enormous.
Consider James C. Marsters, who helped end the isolation of the deaf around the world. The Wall Street Journal reported on his death:
As an orthodontist, a licensed pilot and a sometime-professional magician, James C. Marsters mastered fields challenging for anyone, even more so for a profoundly deaf person such as himself.
His greatest feat was to conjure the text telephone, or TTY, which for the first time gave deaf people independent access to the telephone via teletype machines. It was the first in a string of technologies that help deaf people communicate.
Mr. Marsters, who died July 28 at 85 years old, defied the isolation many deaf people of his generation experienced. He willed himself into the mainstream long before there were technologies and programs to help deaf people do so.
People like Marsters exemplify how the market encourages people to do good while doing well. Markets are not perfect, nor are the entrepreneurs who drive them. But then, human beings are not perfect. However, human liberty — in the form of economic freedom in this context — is the best environment in which to foster a society that is both prosperous and good.
Do You Like Swedish Models?
No, not these kind. Instead, I’m in Stockholm for a meeting of the Mont Pelerin Society, and this gathering of classical liberals (i.e., the Adam Smith types that believe in freedom, not the modern liberals that favor collectivism) has featured some discussion of the Scandinavian social welfare state – often referred to as the Swedish Model.
What is particularly interesting is that Sweden is not the left-wing paradise that some imagine. Yes, government is far too big, consuming about 50 percent of economic output. But Sweden also has an extensive system of school choice. Equally remarkable, Sweden has a system of personal retirement accounts. Indeed, if one removed fiscal policy variables from the ratings, Sweden would be more free market than the United States in the Economic Freedom of the World rankings.
But even in the area of fiscal policy, Sweden is making progress. In recent years, policy makers have abolished both the death tax and the wealth tax. And the corporate tax rate has been reduced significantly below the U.S. level.
Sweden often is cited as an example of a nation that proves a big welfare state is not an obstacle to being a rich society. But as I wrote in my study comparing the United States and the Nordic nations:
Many prosperous nations in Western Europe have large welfare states. This leads unsophisticated observers to sometimes assume that high tax rates and high levels of government spending do not hinder growth. Indeed, they sometimes even conclude that bigger government somehow facilitates growth. …This analysis puts the cart before the horse. It is possible for a nation to become rich and then adopt a welfare state. …A poor nation that adopts the welfare state, however, is unlikely to ever become rich. Before the 1960s, Nordic nations had modest levels of taxation and spending. They also enjoyed—and still enjoy—laissez-faire policies and open markets in other areas. These are the policies that enabled Nordic nations to prosper for much of the 20th century. Once their countries became rich, politicians in Nordic nations focused on how to redistribute the wealth that was generated by private-sector activity. This sequence is important. Nordic nations became rich, and then government expanded. This expansion of government has slowed growth, but slow growth for a rich nation is much less of a burden than slow growth in a poor nation.
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