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An Entrepreneur Who Dares To Celebrate Capitalism.

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Whole Foods founder and CEO John Mackey didn’t endear himself to a good portion of his customer base when last week he spoke the truth about socialism and called capitalism “the greatest thing humanity’s ever done.” But he is right. We owe our prosperity to free-market capitalism. If ours was instead a “progressive” system of government preferred by many of Mackey’s patrons, we’d be much worse off.

Speaking via video to American Enterprise Institute President Robert Doar about his new book “Conscious Leadership: Elevating Humanity Through Business,” Mackey said “we can’t throw out capitalism and replace it with socialism, that will be a disaster. … It doesn’t work.”

Who would know this better than a successful businessman? A member of The Squad, that hard-left group of congresswomen who truly have nothing of worth or decency to offer? Joe Biden, who’s lived off a government paycheck (and likely the ill-gotten gains of corruption) all but a few years of his adult life? Sen. Bernie Sanders, “the enemy of every entrepreneur” who “has made a public career out of vilifying corporations, free markets, and the wealthy”?

Not all Whole Foods customers are wealthy, woke, granola-crunching political progressives who have posted “We Believe” signs in their yards and vote Democrat. But that’s the stereotype and there’s a reason stereotypes exist: They are quite often accurate.

Our experiences tell us the typical customer at one of Mackey’s stores is more likely to support Biden, Sanders, Sens. Kamala Harris and Elizabeth Warren, and Rep. Alexandria Ocasio-Cortez than President Donald Trump or even a Sen. Rand Paul or Sen. Ted Cruz. So they probably won’t notice the yawning gap between Mackey, who through capitalism has developed a stimulating and often rewarding shopping experience, as well as created immense wealth and nearly 100,000 jobs, and Biden, Sanders, Ocasio-Cortez, Warren and others of the left who have created nothing of value and are forever busy scheming to limit choices, redistribute the wealth of others, and tear down free markets.

This is both a shame and a failure of our culture that has come to be dominated by the left. Rather than credit capitalism for the growing abundance we have around us, the Democratic Party and the media, and about half of America which blindly follows them, tell us capitalism is broken, exploitive, unjust, racist, an environmental toxin, a failure that is in need of repair. And only they know how to fix it. They rant, rail and roar while enjoying opulent lives that the kings and queens of even a century ago could not imagine.

When Mackey tells Doar that “business has to make money,” and if it doesn’t, “it will fail,” he is stating what is obvious to most of us. But much of today’s political class sees businesses as sources of funds to be drained to serve leftist purposes. This is plainly unsustainable. As British Prime Minister Margaret Thatcher famously said, “the trouble with socialism is that eventually you run out of other people’s money” because no wealth is produced, only transferred.

Without capitalism, the American economic pie would stop growing, forcing our advanced society to return to a primitive state in which we fight over the pieces rather than expand the pie. The left knows this and rather than destroy capitalism, a fantasy working its way inward from the fringe, it would rather capture it. This is exactly what the Great Reset, which we wrote about Tuesday, seeks to achieve.

Though the World Economic Forum is exploiting the coronavirus pandemic to advance its “reset,” it’s been actively trying to saddle break and then ride capitalism for some time. Three years ago, it predicted that by 2030, “You’ll own nothing. And you’ll be happy.” That “You’ll eat much less meat” since it will be an “occasional treat and not a staple,” because doing so is good for “the environment and our health.” That fossil fuels will be “history” and “Western values will have been tested to the breaking point.”

We’re not being cynical to point out that these are less “predictions” than they are goals for an organization that has visions of centrally planning the global economy.

Goals, we might add, for the rest of us. Because those who are resetting the world will own things, including the lives of the governed. And the “resetters” will eventually come after those Whole Foods customers who performed perfectly their roles as useful idiots to an agenda that’s hostile to free markets and liberty.

The Entrepreneurship Formula To Returning The U.S. Economy To Its Before-Covid Glory.

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At the end of October 2020, third-quarter economic growth increased by a record 33.1 percent as American small businesses reopened their doors and workers returned to their desks and stations. The nation was on the right path to return to its before Covid economic dynamism where everyone who wants a good job can get one — the birthright of all Americans.

Yet we still have a ways to go before we have recovered from the Covid-19 economic crisis. How can the country turbocharge the economy so that economic opportunities return to and surpass the era before Covid-19?

By promoting entrepreneurship, which creates jobs, higher wages, economic growth, and the products and services that make the U.S. the nation with the highest living standards in the world. Like alchemists, entrepreneurs turn basic natural materials into something golden — namely, goods and services that people value. At a macro level, this process creates countless economic opportunities.

According to the Kauffman Foundation, U.S. entrepreneurship was firing on all cylinders in 2019. Americans were choosing to open small businesses at historic rates that were significantly higher than just a few years before. I saw this entrepreneurship first-hand at my business. Thanks to the pro-entrepreneurship climate, I was able to expand, hire, and raise wages, benefitting my workers and the local community.

The benefits of this entrepreneurship trickled down to all Americans. The Census Bureau recently reported that in 2019 median incomes grew at the historic rate of 6.8 percent. So much for the mantra of “stagnant wage growth.” Wages grew even faster for minorities and low-income workers, proving once again that an entrepreneurial climate helps those with the least opportunities the most. Meanwhile, the poverty rate fell to a 60-year low.

So how can we return to this entrepreneurial climate before Covid? By pursuing public policy conducive to entrepreneurship, including tax cuts, deregulation, and access to credit.

The last few years have seen a lot of this entrepreneurship fuel. In 2017, the biggest small business tax cuts in history were passed, giving entrepreneurs like me more funds to invest in our businesses. Small businesses should be allowed to reinvest their earnings back into their businesses to create jobs and better products and services. The tax cuts have allowed us to do that.

The recent reduction of burdensome regulations such as counterproductive and byzantine labor law mandates regarding employee classification allows entrepreneurs to focus on their work and their employees, not paperwork.

And eliminating the worst aspects of the Dodd-Frank financial reforms allowed small businesses to find more funding opportunities to get their ideas off the ground. This access to credit stands to especially help women and minorities, who — as Kauffman Foundation research indicates — have the least access to credit.

And how can we enact more of these pro-entrepreneurship reforms to buoy our economy back to its recent heights? By electing political candidates who make a commitment to these entrepreneurship principles. Politicians often have difficulty understanding the needs of entrepreneurs because they have never worked in the private sector, let alone ran a business. Voters should look to support political candidates with business experience. These candidates understand how public policy affects paychecks. They can foster the entrepreneurship climate that’s needed to return the U.S. economy to its former glory.

In other words, a strong economy is a simple formula: Greater entrepreneurship, which is created by pro-entrepreneurship public policies, which is created by electing pro-entrepreneurship politicians. Make no mistake: The success of the U.S. over the next few years depends on how well it follows this formula for success.

 

Joseph Semprevivo is the owner and manager of Joseph’s Premier Real Estate in Vero Beach, the former New Mexico State Economic Development Commissioner and a partner of the Job Creators Network Foundation.

Unsure Of Your Direction In These Turbulent Times? Entrepreneurship Can Provide All The Answers You Need.

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2020 has been a strange year. My friend Ben always asks me, “Is the world crazy enough for you today?”  He knows I nurture the entrepreneurial spirit and he likes to challenge me: there’s too much uncertainty in 2020 even for those who typically embrace it, which is a good definition of entrepreneurs.

But, in fact, entrepreneurship is the answer in crazy times. Here are several reasons why.

Entrepreneurs are independent.

In times of turbulence, whether economic or political, global, national or local, many people can get confused. They’re not sure what to think, and they find it difficult to sort through competing claims or conflicting evidence. They look for the reassurance of someone else’s opinion to latch onto.

That’s not the case with entrepreneurs. They are independent thinkers. They rigorously seek cause-and-effect where it can be found, but they are also keenly aware that complex systems – when shocked with a pandemic, a disputed election, civil unrest, zero and even negative interest rates, significant changes in shopping and travel habits – can exhibit unpredictable and unstable emergent properties.

Entrepreneurs apply their own judgment based on the information that’s available to them and the insight that’s unique to them; they make a decision; and then they test it against reality by implementing it and adapting based on the results that come back. Independent thinkers are society’s best resource amidst turmoil.

Entrepreneurs are non-ideological.

It sometimes appears that we are suffering through a clash of ideologies, whether social or political or economic. Ideologies tend to be rigid and unrelenting, and those who hold one see opponents in anyone who holds another. Ideologies are not useful to entrepreneurs, and so they don’t include them in their assembly of resources. Ideological rigidity doesn’t mix with the pragmatism and adaptiveness that are keys to entrepreneurial thriving.

A non-ideological world sounds very attractive right now.

Entrepreneurs have no time for identity politics and political correctness.

Entrepreneurs are typically pursuing a finite goal with a finite amount of resources. They need the best people they can recruit to join their team, they need clarity of communication and a shared mission. The last thing in the world they have any time for is worrying about the political correctness of a choice or of a statement. They’ll listen to legitimate market preferences of course, but they won’t be distracted by meaningless noise. entrepreneurs don’t lie bout equality or unity. They assemble diverse teams – where the diversity comes from complementary competencies, not divisive demographic distinctions – and they judge on passion for the task, performance, and results.

Entrepreneurs are non-compliant.

A consequence of the pandemic is that a portion of the population has been beaten down into a state of compliance by authorities wielding mandates. Compliance is undesirable behavior when it is viewed through the entrepreneurial lens of innovation, betterment and economic growth.

We’re all better off when there is non-compliance: when Uber refuses to comply with the mandates n favor of taxis, or when AirBnB refuses to comply with pro-hotel mandates, or when medical researchers defy those who want to constrain experimentation and progress. Non-compliance is the right stance for society, and entrepreneurs can be counted upon to take it.

Entrepreneurs hold to the ethic of service.

In our current conflicted world, capitalism is condemned by some as exploitative and even evil. Some critics see profits that they deem to be extreme and extractive of the value that workers create, others see pollution and environmental damage. They are totally wrong and completely misguided.

The ethic of entrepreneurial capitalism is to serve others. The entrepreneurial market works when producers identify unmet needs and wants among their fellow-citizens who seek betterment and improvement. Multiple entrepreneurs compete to be the one chosen by consumers to meet that need, rivaling each other to come up with the highest quality / lowest cost solution. The ethic of entrepreneurial service has raised living standards across the globe and lifted billions out of poverty.

Keeping entrepreneurs unleashed will generate more and faster improvements in the future.

Entrepreneurs believe in liberty and property.

Entrepreneurship thrives only in favorable market conditions, with the right supportive institutions. The most important of the institutions is the legal framework to make it easy to start new ventures, favors innovation (Professor Michael Munger of Duke University calls the framework permissionless innovation), and imposes as few stifling regulations as possible, so that otherwise unrealized innovation is set free. Overall, we can think of the institutions of entrepreneurship as liberty – freeing creative minds and brilliant engineers and operators to follow their purpose to wherever it takes them in the pursuit of the profit that comes from consumer approval.

The second major institution of entrepreneurship is property. Entrepreneurs stake their own property in a bet that their business can succeed and grow. They take risks with their own property – and therefore need to operate in a framework that respects private property and their right to do with it whatever they will. When private property is restricted, limited, over-taxed, over-regulated or confiscated, entrepreneurship can’t thrive.

Liberty and property together are the institutions of entrepreneurship.

Entrepreneurship Yields Meaning And Purpose.

At the bottom line, we all seek meaning and purpose in life. Meaning refers to our framing of the difference an individual wants to make in the world, the feeling that one’s endeavors are worthwhile. Purpose refers to the specific goal the individual pursues as in making that difference.

Researchers John Bitzan and Clay Routledge of The Challey Institute have documented, based on deep research, how individuals’ belief in the free working of the entrepreneurial marketplace provides them with the sense of meaning and purpose they seek. Bitzan and Routledge call this feeling “individual agency” – the feeling of being free to act and capable of meaningful achievement in the institutional context of capitalism and free markets. Individual agency is the central idea of entrepreneurship.

How Do We Heal A Divided Country? Entrepreneurship.

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The results of the 2020 presidential election suggest that the U.S. has never been more divided politically. The major party presidential candidates received more than 70 million votes each. The distribution of votes clearly indicates the country is almost evenly divided between support for Republican incumbent President Donald Trump and Democratic former Vice President Joe Biden. Unfortunately, the close election has led to a legal fight that is creating a more intense and sustainable divide in the country.

This divide is particularly dangerous for our democracy because it has resulted in widespread mistrust in the ability of the U.S. to come together as it has so many times in the past. The most disturbing thing about this divide is that it goes much deeper than the support of the two candidates. The citizens of this country are split on the way to handle critical issues like health care, poverty, education, the environment, the economy, climate change, Supreme Court appointments, abortion and the handling of the pandemic. There is a disbelief in the ability of the leaders of the “other” party to effectively address these issues. The good news is that entrepreneurship policy has the potential to cross the political divide and effectively address many of the most critical issues facing society.

Supporters of both campaigns agree that small business entrepreneurship is one of the reasons the U.S. has become the richest country in the history of the world. The small businesses that hire local residents have been the backbone of local economies in large cities, small suburbs and rural farms. These mom-and-pop family businesses provide many of the jobs in America and enable people to feed their families. Unfortunately, the pandemic has devastated small businesses in both Democratic and Republican communities. The Main Street businesses in suburbs have been hurt as badly as the small businesses in urban communities and the family farms in rural communities.

According to the U.S. Bureau of Labor Statistics’ U-6 measure of employment, there are more than 11 million people currently unemployed. The closing of small businesses because of the pandemic has led to a 47% increase in U-6 unemployment from the same period in 2019. The next president has to focus on increasing employment by making the support, revitalization and sustainable success of small local businesses a major focus of his public policy. When communities have a thriving small business economy, there are more middle class jobs. Research suggests that these jobs ultimately lead to higher quality health care, better housing, a cleaner environment and even higher student achievement.

Urban, suburban and rural communities that have sustainable small business jobs have lower rates of crime, homelessness, poverty and a cleaner environment. Many large businesses have increased their profitability because they were allowed to remain open during the COVID crisis while small businesses have been closed. Major technology businesses have also grown exponentially because of the increased online sales. The success of many large businesses and struggles of small businesses has resulted in a growing income divide between the wealthiest 5% of Americans and the bottom 50%. The wealth of people who are shareholders in large corporations has grown exponentially, while the income of entrepreneurs and small business employees has dropped significantly during the pandemic.

The most impactful way to address this disparity (in a manner that appeals to both Trump and Biden supporters) is to provide tax incentives (such as a reduced capital gains tax and immediate depreciation of capital investment) to wealthy individuals and organizations willing to invest in small businesses in geographic areas currently designated as Opportunity Zones. I call this the “Entrepreneur Zone Program” or “EZP.” In this program, individuals or organizations that invest in or provide low-cost loans to small urban, Main Street and farm businesses in these zones will receive significant tax breaks to compensate them for taking the risk of supporting these businesses.

To accelerate small business employment, the government could provide entrepreneur grants and issue small business bonds through the Small Business Administration specifically for the businesses in federally approved entrepreneur zones. These programs would not be a burden on taxpayers and potentially lead to an injection of billions of dollars into businesses (in both conservative and liberal communities) that desperately need a lifeline to survive. This lifeline would result in more middle class jobs throughout America.

We are in the midst of a crisis in this country that we have never experienced before. Establishing bipartisan public policies supporting small businesses in Democratic and Republican communities is one of the most effective ways to get the U.S. to become more united and survive this exceedingly difficult period in our history.

Dale G. Caldwell is a professor and the executive director of the Fairleigh Dickinson University Rothman Institute of Innovation and Entrepreneurship

Entrepreneurship Is An Epic Calling.

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Many of us feel the pull of contributing to something “bigger than ourselves”. It could be a cause, a charity, a movement, a great project. It could be mentorship in a collaborative organization. Some people even claim that working for the government qualifies: representing (or regulating) the people.

But doing something “bigger than ourselves” does not have to be interpreted purely as a collectivist principle (sacrificing the rights of the individual for the common good), nor as altruism (living for others and not for oneself).

Almost 250 years ago, Adam Smith pointed out that it is not out of benevolence that the butcher, the brewer and the baker provide customers with dinner. Rather, it is out of self-interest. Which is an 18th century way of describing the entrepreneurial ethic of service.

Ethic of service

In an entrepreneurially driven market, customers – by buying or not buying, repeat purchasing or not, subscribing or not – determine what is produced. To be successful, businesses serve customers. They spend an enormous amount of time and money to understand customers and their preferences and needs, and expend all of their resources in an effort to meet those needs in the way that gains approval. Customers are rational seekers of betterment – they buy what will make their lives better, from their own perspective. They seek happiness. That’s what entrepreneurs deliver: better and happier lives.

The reward for utilizing today’s resources in ways that generate the greatest future improvement to society is profit. It is society’s way of pointing to where entrepreneurs should direct their best efforts. The ethic of service is sustained by reinvesting profit into more investments that benefit customers.

The epic calling of entrepreneurs is to join and accelerate this cycle of service, betterment, profit and reinvestment.

Ethic of Innovation

The market in which customers have all the power is highly dynamic. The genius of customers is to be never satisfied. Betterment is their goal, and betterment never stops. There is always something better in the future, and always a new entrepreneurial market entrant or new R&D team to design it and offer it.

The result of this dynamic is a continuous stream of innovation – new and better products, services, techniques, delivery systems, restaurants, food, payment systems, movies, TV’s, computers, smartphones, and V/R headsets. It’s better service at every store from the high street to the mall, and every dry cleaners and every nail salon and every gas station and repair shop, because innovation includes treating people better while serving them better. The dynamics of the market means that a customer who receives good service from any provider makes that the standard in judging all others. The momentum in the dynamic entrepreneurial economy is always forwards and upwards, towards betterment.

Ethic of digitization

Digitization brings rapid betterment at an ever-increasing pace. It’s exponential. Entrepreneurs both initiate this phenomenon and harness it. Entrepreneurs brought us the internet and websites and search engines and e-mail and online shopping. They made almost infinite amounts of information available to us – certainly much more than anyone can consume or use. The digital economy brings abundance, the opposite of scarcity, which is what economists have told us is the norm in markets. Under digital abundance, all choices are going to become richer and richer, the cost we pay for things we value is going to become lower and lower (irrespective of what governments do to their fiat money – amazon.com is going to offer more and more choices and deliver better and better quality at faster speeds whatever the state of the dollar; we may pay with a different currency).

Entrepreneurs employing digital means to serve customers better will operate in this new world, pursuing and exploring the digital challenge: what are the boundary conditions of higher quality at lower cost? How can they bring digital betterment to everyone in the world?

The emerging standard of digital betterment is that new services need to be 10X better than whatever is already in the marketplace in order to get customers to turn their heads, pay attention, and change from their current services, which are already excellent. The resultant compounding of improvement will rapidly elevate our life experiences.

And, in fact, digitization puts customers even more in charge – interactive technology brings more empowerment and control to customers than ever. We can compare prices more easily, benefit from the experiences of others who supply ratings and reviews, perform more tasks more quickly and easily, and orchestrate our own system of services and experiences in exactly the combinations we prefer. Customers will decide which digital providers they choose to allow into their lives. Only the best will qualify, and entrepreneurs will strive to be in that group.

Ethic of private property

It has been pointed out, most notably by Ludwig von Mises, that the entrepreneurial system requires acknowledgment and protection of private property to operate. Investors are free to invest in projects they judge to have the potential for high returns, founders are free to allocate their own time and resources to their innovative ideas, and customers are free to spend their own money on offerings that please them. This private property-based entrepreneurial system has brought the world increasing standards of living and quality of life for roughly 250 years, lifting billions out of poverty and squalor. Today’s entrepreneurs preserve that progress, despite the efforts of socialists to reverse it and replace private property with state ownership and bureaucratic control. No calling is higher.

Better world, better society

There is no shortage of pessimists who see the world through the lens of decline. Most of this is partisan politics, which is, indeed, descending to new lows. Some of it is politics combined with scientism (as in climate change fear). A good antidote to this pessimism is Hans Rosling’s book, Factfulness, which compiles hard data from impeccable world sources demonstrating the incredible, consistent and ongoing global progress in fields like life expectancy, child mortality, reduced incidence of poverty, growth in living standards, levels of education, elimination of disease and even reduced pollution.

Entrepreneurship makes all of these possible via positive thinking, ideation, innovation, organization, and analytics. But, beyond these functions, entrepreneurship is the dominant force for good in the world. Entrepreneurs are optimistic (because they see the opportunities for progress), polite (because they value relationships), collaborative (to make relationships productive), law-abiding (the wrong side of the law is unprofitable), non-violent (violence is also unprofitable), and civil (because community building contributes greatly to success).

Epic calling

In Yu-Kai Choi’s book Actionable Gamification, which is an insightful analysis of human values, Epic Meaning & Calling is the core drive that is in play when a person believes they are doing something greater than themselves. Entrepreneurs experience that calling. Whatever their individual firm, invention, project or initiative, they feel the higher calling of betterment, and they derive part of their psychic profit from responding to that calling. They feel different and special because of their role and their contribution.

And their contribution is, indeed, special. They are the drivers of the free market economy that raises everyone’s potential and attainment. They are the pillars of a collaborative culture of achievement and accomplishment. They are the creative catalysts of change. Society is better the greater the role and influence of entrepreneurs.

More of us should respond to the epic calling.

Right Now Is A Great Time To Start A Business.

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People are often afraid to go out on an entrepreneurial limb – but now’s a better time than ever to build a business. Recessions and unstable periods often present the best opportunities to start new companies. During the 2008 financial crisis, for example, startups like Uber, AirBnB and many others were founded partly as a response to changing market dynamics.

In a little-known challenge to the economic fallout of the pandemic, millions of people have turned the crisis into an opportunity for progress. That is especially true in the United States. According to the Census Bureau, new businesses are springing up at the fastest rate in more than a decade. So far in 2020, the bureau has received more than 3.2 million applications for employer identification numbers. The comparable figure for the same period last year was 2.7 million.

Faced with furloughs or layoffs, many people are fashioning their own form of work. They see the pandemic as a now-or-never time to pursue a dream. (See related story, here.) Choose your cliché to explain this burst of entrepreneurship: Necessity is the mother of invention. Sweet are the uses of adversity. If life gives you lemons...

Some people can obtain loans, but many start with their own savings, driven by the passion of a good idea to invest in a new service or product. They tap into unexplored creativity, flexibility, and adaptability. “The most important lesson of COVID-19 is learning to adapt,” Myriam Simpierre, who opened a neighborhood grocery in New York City, told MarketWatch. “Distribution channels go awry. Prices change. A pandemic happens. Anything can happen. You have to be adaptable.”

Another entrepreneur who opened a hair salon makes sure she regularly sweeps the sidewalk out front and provides a bowl of water for passing canines, giving her an opportunity to “talk to everybody” passing by. In turn, she says, the neighborhood has embraced her business.

While many existing businesses have been forced to shut down, optimistic newcomers push ahead, in part out of a joy in being their own boss. The pandemic has produced a supercharged version of “creative destruction,” the theory that a good economy thrives when older businesses lose their way and innovative ones spot an opening. That churn is also putting the lie to the idea that only big corporations will survive the pandemic.

One reason many of these new businesses are enjoying early success is that customers crave in-person buying experiences after long periods of social isolation. That’s especially true when customers can meet new people, such as in a cafe. Other entrepreneurs spot new trends – such as a strong demand for bicycles – that they can supply.

A personal trainer in Madison, Wisconsin, who lost his job, started a mobile bicycle repair business, investing about $1,000 in equipment. Now he’s booked fixing bikes at people’s homes all day long, earning more than he did in his previous job.

“It feels like I built a rocket and lit it – and now I’m just holding on to the tail,” he told The Wall Street Journal.

Starting a new venture can be scary. But it can also be liberating. People find they must draw on their innate qualities, such as a humility to serve or the courage to test a new idea. Those are the fuel behind any new venture and are just one of the salves during the pandemic.

A Sickening Reminder Of How Quickly Politicians – Who Never Miss A Paycheck Or A Meal – Can Wreck Things For Others.

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Why we chose this article: We believe that it is important for all of us to think carefully about the economic damage that our elected politicians, at federal, state, and local level, impose on people, and its direct negative effect on people’s quality of life, and, sometimes, ability to survive. It is, as John Tamny states, sickening.

Café Phillip is a sandwich shop on the NE side of K Street in Washington, D.C. Call this the historically unfashionable K Street versus K Street NW where the major lobbying shops have historically located. Until March of 2020, Café Phillip was booming. Staffed with energetic and highly professional immigrant employees, it did huge business in a part of D.C. that was increasingly filling up with office workers and residents.

Then came the political panic related to the coronavirus. Even though there were no indications from the virus’s origin, or Asia more broadly, that it was terribly lethal, U.S. politicians panicked. In their panic they quite literally chose to fight the virus with strict lockdowns that resulted in soaring unemployment, bankruptcy, and economic desperation. It would be hard to imagine a more wrongheaded approach to a health threat. Think about it.

Economic growth has historically produced the resources for scientists and doctors that have made victories over viruses possible. Yet in their panic, politicians on the local, state, and national levels forced the very contraction that would logically shrink economic resources, only to follow up with the extraction of trillions from the private economy in order to throw money at the horrendous problems they created. You really, really can’t make this up.

If Washington, D.C. Mayor Muriel Bowser can sleep at night, it’s a miracle. Café Phillip is instructive in this regard. What was formerly packed, what was formerly defined by frenzied sandwich making in keeping with its enormous popularity, is generally empty during the day. Café Phillip is still open, at least for now. Other businesses in the area are beginning to close. Panicked politicians who will never miss a meal or a paycheck decided we the people couldn’t be trusted to go to work. We might spread the virus. Lockdowns were instituted, supposedly for our own good.

Sorry, but economic growth is what’s for our own good. It doesn’t just produce resources for those eager to find cures for viruses that make us ill or kill us, economic growth also frees us to quarantine or shelter-in-place if we feel some kind of virus threatens us. Please think about this. While many had the choice to work from home amid this panic, their options would have been great deal more limited in 2000. In 1980, forget about it.

Back to Café Phillip, to walk in nowadays is to see formerly energized employees with forlorn looks on their faces, mostly immobile as they wait for customers. It’s a far cry from what it used to be. And these are the employees that the Café still employs. The staff is a fraction of its former self, and it’s not unreasonable to speculate that if D.C.’s strict rules with regard to restaurants and offices continue, the Café will shut down.

It’s all a sickening reminder of how quickly politicians can wreck things. How they can thoughtlessly break things. They’re way too powerful on all levels.

Worse is that they’re breaking things in response to a virus that is once again not very lethal. What was obvious in the early part of 2020 when deaths didn’t soar in China is still obvious now.

To put a number to all this, the New York Times has reported all summer that over 40% of U.S. coronavirus deaths took place in nursing homes. The people dying with the virus tend to be very old, and with some kind of pre-existing malady or maladies. Who knows what the actual numbers are, but it’s no reach to conclude that of the 200,000 reported deaths related to the coronavirus, some (or maybe a lot) were on the verge of death either way.

To the above, some will respond that the musings are those of a heartless person. No, they’re not. In truth, they’re the words of a realist.

As this is being written, the global death count from the virus is a million people, but it should once again be at least suggested that the number is inflated. To die with something isn’t necessarily to die of it.

Still, for the purposes of this piece, let’s assume it’s a million. Better yet, let’s assume two million since the virus was traveling around the world for months before anyone was really testing.

The deaths are of course sad, but the same New York Times reporting that over 40% of U.S. virus deaths have happened in nursing homes has also projected that over 285 million of the world’s inhabitants are rushing toward starvation. Yes, you read that right. The Times won’t say it directly, but the panicked political reaction to the virus that revealed itself in contraction-inducing lockdowns and other limits on activity has parts of the world’s economy collapsing, and as a consequence hundreds of millions rushing back into poverty, starvation and death. Poverty is easily the biggest killer man has ever known. Nothing else comes close.

This would ideally get more attention from the Times. Consider the newspaper’s above-the-fold headline from Monday: “A Nation’s Anguish As Deaths Near 200,000.” Really? One senses the headline writers don’t even believe this. When old people die it’s sad, and sometimes very sad. But it’s rarely – if ever – a tragedy. Figure that death from old age is a very modern concept born of healthcare advances made possible by the very economic growth that politicians mindlessly snuffed out in their panic.

Thinking about anguish, the true anguish is born of hundreds of millions rushing back to poverty, starvation and death thanks to politicians fighting a virus with forced contraction. After that, a successful business is a bit of a miracle too. Most don’t make it, but when they do they lift up owners, employees, and customers alike. Tragic is seeing what improves people, gives dignity to workers, and wealth to owners being snuffed out by politicians who will once again never miss a meal.

The New York Times might think about this as it publishes alarmist headlines that obscure actual truths reported within the paper. It’s sad when we lose our grandparents and old people more broadly, but it’s tragic to read of people starving, and heart-wrenching to contemplate formerly productive workers sitting, waiting for customers; increasingly aware that what puts a roof over their heads will no longer. Proportion New York Times, proportion.

John Tamny is editor of RealClearMarkets, where this article first appeared, and Vice President at FreedomWorks. 
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The Theft Of TikTok By The American Political Class Is Shameful.

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For the longest time American conservatives have properly venerated Hong Kong’s wholly free-market ways, along with what protects its economy from the grasping hands of politicians. The wealth there is of the mind. The wealth is people. Hong Kong has no physical wealth like oil, which means what makes the city great can’t be taken. If ever politicians overreach (are you listening, Beijing?), the people who make Hong Kong amazingly prosperous will take their talents, as in what’s inside their heads, elsewhere.

Lest we forget, a major driver of Hong Kong’s brilliant post-WWII ascendance was the tragic rise of Mao and communism in China. As Jonathan Kaufman explained it in his new book The Last Kings of Shanghai, in response to Mao’s rise “100,000 people from Shanghai would arrive in Hong Kong, providing – along with the local Cantonese – the skills and economic infrastructure that would bring the city forward.” Translated, Shanghai’s brilliant capitalists moved their genius to where it wouldn’t be suffocated. Mao and his murderous cronies thieved billions worth of wealth, including $500 million worth of properties and businesses amassed by Victor Sassoon alone, only for the wealth taken to vanish. Stating what should be obvious, wealth disintegrates when it’s forcibly ripped from the hands of those who created it. Politicians destroy things, which explains why a regime of light taxation is always best when it comes to economic progress.

That wealth taken by force rarely grows in the hands of the takers has long been an article of faith among American conservatives. So properly convinced were they of this truth that they actually took to lamenting countries “rich” in natural resources like oil, gold, land, or anything else with physical qualities. They referred to tangible wealth as the “resource curse.” If the wealth just exists it theoretically saps innovation, but more important is that physical wealth can be taken. See Venezuela with its oil. See countless African countries. Hong Kong will never go the route of confiscated wealth simply because what makes it staggeringly rich is its people. Take them out of the equation via confiscation, and Hong Kong would be poor.

Which brings us to the shameful theft of Chinese company TikTok by the political class in the U.S. Yes, that’s what’s happening. Let’s not hide from this embarrassing truth. Though the greatest technological innovations of the internet age have largely been hatched stateside, with TikTok the Chinese happened on a globally popular concept ahead of American technologists.

With China’s economy increasingly free, it’s only natural to assume that there are more than a few Steve Jobs and Jeff Bezos equivalents in this country in a hurry. Let’s hope! Just as Apple Inc.’s growth has been hugely bolstered by sales in China (1/5th of Apple’s iPhone sales happen there), and to the betterment of the Chinese people, let’s hope Chinese innovators now and in the future match Jobs when it comes to creating goods and services that massively increase living standards stateside. The only closed economy is the world economy, so if the Chinese prove skilled at rushing the future into the present via remarkable innovations, Americans will benefit as though the technology had been hatched right next door.

With TikTok, the Chinese created something that Americans fell in love with, only for conservatives to disappointingly cheer the Trump administration’s threat to ban the app unless its U.S. operations were sold to a U.S. technology company. One conservative editorial oddly claimed that the shameful mugging of TikTok was an example of the “market increasing business competition and solving a political problem at the same time.” No, that’s not right. Conservatives used to be clear that the politicization of commerce was an example of market forces being pushed aside to the detriment of wealth creation and progress.

Worse, this embarrassing conservative embrace of thievery plainly ignores what conservatives have long believed about the source of Hong Kong’s genius. It’s once again the people. Embarrassing as the theft of TikTok is, what’s happening with it supports this very point.

Indeed, as Wall Street Journal reporters Liza Lin, Aaron Tilley and Georgia Wells reported last week, the forced sale of TikTok by the allegedly market-friendly Trump administration is proving a bit of a challenge. The reasonably aware surely know why.

As the Journal reporters explained it, those interested in bidding on TikTok “believe a large portion of the value of TikTok is in the suggestion algorithms that keep users glued on the app.” As they went on to write, “A person close to the talks likened TikTok without its algorithms to a fancy car with a cheap engine.” Bingo! When it comes to technological wealth, it’s not physical, rather it’s metaphysical. What makes TikTok great is the people. American politicians whom we shouldn’t expect to know better, but cheered on by conservative pundits who should know better, have forgotten that wealth taken from others isn’t terribly valuable absent the brilliant minds who made what’s been taken valuable to begin with. Translated for conservatives, TikTok isn’t TikTok minus those who made it TikTok.

That the forced taking of what’s someone else’s is proving a bit of a challenge has implications beyond just the theft of TikTok. In particular, it eviscerates the modern conservative obsession with the Chinese and their alleged “theft” of intellectual property. The embarrassing American attempt to take TikTok is a reminder of how overdone such paranoia is. The value of technology is yet again a consequence of those operating it. In short, if U.S. technology is brilliant, which it is, politicians needn’t fear its theft. Like TikTok, the value is in the people who created it. The Chinese can’t steal American genius, and the American political class can’t steal Chinese genius.

Which is why this whole episode has been so thoroughly awkward. Come on Americans, the whole world is watching. We know better. History is clear that when governments take things from private hands by force, what’s taken usually loses its value. What applies to the rest of the world also applies to us. Let’s please free TikTok from the U.S.’s odd and economy-sapping flirtation with industrial policy.

John Tamny is editor of RealClearMarkets, Vice President at FreedomWorks, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). His new book is titled They’re Both Wrong: A Policy Guide for America’s Frustrated Independent Thinkers. Reprinted from RealClearMarkets

Meet The Visionary Doctor Audacious Enough To Propose A Free Market In Healthcare.

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Recently, on the Economics For Entrepreneurs podcast, I enjoyed the privilege of talking to Dr. Keith Smith, a visionary who sees a splendid future for healthcare in America, through the lens of free-market entrepreneurial thinking. Here are some highlights.

The market for healthcare in the USA may reasonably be described as the unfree-est of all, given all of the accumulated legislation, the government regulation and restrictions, and the intermediaries and third parties sitting between the physician and the patient. Opaque and generally excessive pricing is one of the many symptoms of this dysfunctional market, but it’s not the only one.

In fact, Dr. Keith Smith, co-founder of the Free Market Medical Association (FMMA), tells us that the challenge is more fundamental even than pricing: it is the bringing together of buyers and sellers. That’s what forms a market, and all the intermediaries and government interventions make the buyer and the seller unable to negotiate the mutually voluntary and mutually beneficial exchange that characterizes a free market.

When I just think about the question, bringing buyers and sellers together, that is an indication of a truly dysfunctional set-up in the market – that that question should even be posed. Buyers and sellers together are typically what forms a market, and that mission of the FMMA, which is very tough work, bringing buyers and sellers together, really has to overcome much that has been thrown in between buyers and sellers. I think whenever we look at the Free Market Medical Association, we have to acknowledge that bringing buyers and sellers together is something that is meant to overcome all of the obstacles that have been placed between them.

Who are the buyers in Dr. Smith’s conception? Of course, buyers include patients and future patients, which means almost all of us. In the short term, Dr. Smith has in mind what economists and marketers would call a “core target consumer”.

A buyer is basically someone who has sticker shock.

Jim Epstein from Reason Magazine picked up on that early, that a buyer is someone whom we would all characterize as an individual who actually cares what it costs, and there are a lot of people in the United States who receive medical services who could care less what it costs because they’re not paying the bill. They don’t have the sticker shock. So our focus in developing a free market must begin with those who actually care.

Beyond the basic buyer-seller functionality, Dr. Smith sees the potential in a free market for a renaissance of healthcare quality.

The second part of this FMMA initiative is the soaring of the quality that is actually delivered. And that’s why this is such a great message – why I get up every day just anxious to tell anyone that’ll listen, this is a good news message. And we’re not really used to good news messages in the medical industry. All you hear is the spiraling cost and the sporadic quality. But what a market does, a true market, when someone says and declares in a marketplace of sticker shocked buyers, “Here is what I do and here is the price I believe should be attached to it,” they’re declaring their own value. And if they’re not any good, then they will not be chosen. People will not vote for them with private funds or the proxies will avoid them because their reputation is on the line as an advising buyer.

So whenever people are not good, whenever people are frauds in a marketplace, they are naturally culled.

Should doctors concern themselves with the non-medical aspects of their patient relationships? Of course, says Dr. Smith. They should be an all-around advocate for the well-being of patients.

Patients should feel confident when they go see their doctor that they have an unapologetic advocate. I think that many physicians are medical advocates. I think most physicians are. But in order to be a complete advocate and to be a financial advocate, I think that physicians have to more and more assume the role that other entrepreneurs assume and bear some risk, and sort of put their chest and shield out there in front of patients. I hear physicians sometimes say, “I just want to practice medicine. I don’t want anything to do with the business or the money side,” and all they’re doing with that cop-out statement is abandoning their patients to the financial wolves, many of whom are happy to step in and make a living off of that physician abandoning that patient.

I don’t think there’s any willful neglect. I just think that we’ve grown up with a system that has exploded so that it’s very difficult to navigate. It’s very creepy. But it’s actually very simple to reject all of the third parties, assume the proper role of the businessman and the entrepreneur, which actually allows the physician to assume the role of financial advocate as well as medical advocate for the patient.

Is this wish for a free market just pie-in-the-sky? Quite the opposite. Dr. Smith himself successfully operates the Surgery Center Of Oklahoma, a clinic providing an array of surgical services listed on a “menu” accompanied by guaranteed prices with no add-ons or hidden fees. Similar providers in different locations around America can be found on the FMMA website. Free-market medicine is already practiced. It’s proven. Now it’s a matter of expansion, which Dr. Smith plans to accomplish via education.

You can practice in a way where you are not leveraged by government money and thrive. Not just survive, but really thrive. The other part is educating everyone. I think that as physicians begin to realize that they need to acknowledge the system that they’re in, and also I think as physicians see that other physicians are unplugging and really seceding from this sick system, and how happy they are, and how successful they are, that tends to get rid of many of the fears that are paralyzing for people who are right on the edge who are ready to make this move.

At Free Market Medical Association, what we’re trying to do is educate everyone that it’s doable, it’s possible, it’s being done, it’s being done increasingly by more and more of the folks who initially said it could not be done.

One major step to take is to expand beyond individual buyers to corporate and other institutional buyers. The core target in this group is self-funded healthcare buyers – companies who provide healthcare services to their employees but choose not to go through insurance companies and consultants and other intermediaries, but to buy direct. Dr. Smith calls them proxy buyers – they are buying on behalf of the individuals who actually consume health care.

Companies whose margins are tighter who have not been self-funded are beginning to self-fund. Keeping in mind that self-funding is where companies buy medical services for their employees out of operating revenue and bear the risk rather than pay an insurance company to bear that risk and make a ton of money for doing so. So, when the proxy buyers, when the self-funded companies step away and quit succumbing to the Kool-Aid sold to them by the brokers and all the other intermediaries, the PPOs, all of those people that are just getting rich off of this current system, when the self-funded buyers walk away from them and look around, they will see this free-market solution is just shining right in front of them. The ticket to save gigantic amounts of money while simultaneously rendering better benefits to employees, while also ensuring that they receive even higher quality care.

That proxy buyer of self-funded companies, when unleashed, will be the reason we experience that tipping point and then everyone will benefit. The individual patients will benefit, because as the market develops and prices fall, prices will fall for everyone. Quality will go up for everyone. This rising tide is going to flood everyone’s fortunes higher and it’s very exciting to think about.

Once this step is taken, Dr. Smith exudes confidence that our long healthcare nightmare is coming to its close.

I am now more optimistic than ever that I’ll see it not just in my lifetime, I’ll see it in my career where the people in this country reject the government’s handling of this industry, selling and auctioning all of these factors to the cronies who have ponied up in Washington and we will see a true market emerge and a real rebirth of the great tradition of medicine for which the United States has been known for quite some time.

An end to the nightmare, of course, will require a loosening of the grip of the Federal Government on healthcare regulation, pricing, and provision.

But ultimately you run into the culprit, the ultimate culprit everyone has to keep in mind is the federal government. It’s Uncle Sam. I tell everyone, we can bash the pharmacy companies, we can bash the PPOs, and they all deserve a good bashing. But Uncle Sam is driving the getaway car. None of these shenanigans are possible without Uncle Sam riding shotgun for all of this thievery.

As with many similar situations, the solution lies in the shift from central control, which the government insists on exerting, to a decentralized ecosystem with individual choice and local responsiveness to market needs. Dr. Smith is a Hayekian.

I think it’s consistent with F. A. Hayek’s concept of the knowledge problem. What’s going on in the market in Arizona is very different, in all likelihood, than what’s going on in the market here in Oklahoma. The response to challenges there, the response to consumer preferences there should be different.

If you are excited, intrigued, or even merely curious about the emerging phenomenon of free-market medicine, there is an upcoming opportunity to attend the Free Market Medical Association 2020 Annual Conference, which is both virtual and live this year.

The date of the conference, the virtual day is the 11th of September and then the next day, the 12th of September is the live part that we’ll have here in Oklahoma City, which also will be viewable by the virtual attendees.

Click the link here to discover more about attendance.

Full podcast transcript here, or listen here.

 

Celebrating Fierce Individualism, Inspiring Inequality, And Creative Entrepreneurship.

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There are so many reasons to celebrate the United States of America. Thankfully too many reasons to celebrate what’s spectacular. Countless books, articles and songs speak to this happy truth. In that case, this write-up will lightly cover just three of many reasons to cheer what rates a routine standing ovation.

The U.S. is defined by fierce individualism. Sorry, but we’re not “all in this together” in the Land of the Free. In truth, the inspiring idea that led to the U.S. was the rather novel notion that a very limited government would exist to protect the rights of individuals to live as they want. People would be free to conform, rebel, or somewhere in between so long as their pursuits didn’t trample on the rights of others.

Crucial is that this elevation of a “live and let live” ethos proved a magnet for the world’s strivers. They risked it all, including crossing oceans, for the chance to be a part of a great American experiment rooted in freedom. The ability to live and think freely overwhelmed the very real possibility that they would die before getting the chance to.

All of which speaks to another reason to celebrate America: its very existence rejects so much conventional wisdom. For the purposes of this piece, the narrow focus will be on why the U.S. mocks all the hand wringing about inequality, and the laughable contention that the gap between the rich and poor harms the poor.

The United States is living proof of why this isn’t true. Indeed, it would be hard to find a country more wealth unequal than the United States. To be fair, massive inequality was the U.S. design. See fierce individualism yet again. If the individual right to freedom of thought and action was going to be protected, it was only natural that some courageous enough to take their talents here would achieve in amazing ways. And so they have. Great wealth has always defined the U.S., and it does to this day.

Yet the world’s poorest keep risking it all to get here, don’t they? Ronald Reagan used to say something along the lines of “facts are stubborn things,” and the facts are that the world’s poorest continue to flock to what is one of the world’s most unequal countries. That they do thoroughly wrecks the popular narrative that wealth inequality harms the poor, and/or that they’re inflamed by it. In truth, they take huge risks in order to live and work where inequality is greatest.

If anyone doubts the above assertion, consider where the poorest Americans migrate to once they’re in the U.S. It’s rarely Buffalo, Flint and Jackson, but often New York, Los Angeles and San Francisco. That’s the case given the basic truth that opportunity is greatest where the density of superrich is greatest.

It’s not just that the mass production of former luxuries by the rich (think cars, air conditioners, mobile phones, and computers) lifts our living standards in incredible ways, it’s also that the location of their innovations tends to be where other talented people cluster, only for the range of work options that lift all manner of skill sets to explode. The U.S. is a magnet for the world’s strivers because of its elevation of freedom, and freedom logically correlates with wondrous inequality as varied talents are free to showcase them in endless ways.

Which brings us to the third reason to celebrate the United States: its appeal to those with natural “get up and go” means that it’s the epicenter of entrepreneurialism. Think about it.

The U.S. is in so many ways separated from the old world of Europe and Asia. In an historical sense, it’s the distant new world. The act of leaving the past behind in pursuit of freedom and opportunity (as opposed to security) in the United States is and was the ultimate entrepreneurial act. Imagine leaving the known for a country that offers freedom, but not much else. Such a country would naturally attract the motivated, the visionary, the dreamers….

Having attracted those willing to risk it all just to taste freedom, it’s no surprise that so many Americans and their descendants have risked it all in a commercial sense. Populated by the motivated, those same motivated people regularly channel their herculean energy into creating new ways of doing things.

As a nation of people from “somewhere else,” these entrepreneurial wanderers restless in their search for better relentlessly bring the future into the present. Crucial is that they’re able to rush tomorrow to today precisely because they’re able to express their intrepid nature in a country that exists specifically to protect their right to do just that.

In short, it’s no speculation to say that the late Steve Jobs, who descended from Syrian immigrants, could never have created Apple in Damascus. Neither could Andrew Carnegie have revolutionized the steel industry in Dunfermline. The U.S. is where energetic dreamers become entrepreneurs precisely because the U.S. is where those who see the future differently are free to show why it will be different.

Thank goodness for the U.S. and its design that enables wondrous human flourishing. If the U.S. didn’t exist now, it would have to be invented so that a still primitive planet could be propelled into the future by human capital formerly suffocated by a world that cruelly lacked its most essential country. Let’s celebrate the U.S. indeed.

John Tamny is editor of RealClearMarkets, Vice President at FreedomWorks, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). His new book is titled They’re Both Wrong: A Policy Guide for America’s Frustrated Independent Thinkers. Image AP Photo/Steven Senne
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