When I was in high school, I spent a lot of my free time studying what Thomas Sowell would call “basic economics”. Through reading Adam Smith and participating in Learn Liberty’s online courses, I learned about the power of free market competition to maximize human happiness and freedom.
Business does much less harm than big government. Competition keeps business in check much better than government regulators do.
The point of view I developed is perhaps best summarized by the above quote from media personality John Stossel. Government is a centralized process dictated by elites who think they know what’s best for us. It fails because it cannot possibly take into account all of the needs, desires, and complexities inherent in human behavior. Markets are a decentralized process that allow human beings to make decisions about their own lives while competition between businesses forces people to work towards their maximum potential in the most efficient way possible.
While most people probably don’t think about markets in this exact way, the basic phrasing is incredibly influential. I believe this line of thinking is prominent enough to define what makes popular economic thinking in the United States different from other countries like Finland or Singapore.
This is related deeply to our experience of the cold war, which was framed as a good versus evil struggle of Capitalist freedom and Communist oppression. I could spend a long time discussing how ridiculous this framing is, but for the sake of clarity I want to simply observe that most Americans tend to understand the economy in terms of a sliding scale from private to government control, with private control meaning more freedom and government control risking more oppression. In this sense, capitalism and democracy are almost the same thing.
This framing is has been implicitly rejected by leaders like Lee Kuan Yew of Singapore and Deng Xiaoping of China. Their administrations achieved unprecedented economic success pursuing profits with heavy-handed government control and government-owned enterprises collaborating with private businesses. Not only have they decoupled capitalism from…