His advice was also sought around the world. Most famously, in the 1970s he advised the military government of Chile – for which he received years of abusive criticism – and the communist government of China – which no one seemed to mind. Happily, both governments listened, and both have become “economic miracles.” Chile now has the most successful economy in Latin America, and China’s path along the “capitalist road” has made it more prosperous than anyone could have dreamed in 1976, the year that Mao Zedong died and Friedman won the Nobel Prize.
Earlier this week in the Wall Street Journal, Nigel Lawson reviewed Ron Bailey’s new book, The End of Doom. (gated) It’s a book that I’m especially eager to read . Here’s a slice from Lawson’s review:
It is even easier for him [Bailey] to show that a fear of the world running out of natural resources, popularized by scaremongers like Stanford demographer Paul Ehrlich, is wholly without foundation, as an elementary understanding of markets clearly shows. No doubt the age of oil will one day come to an end. But as my old friend Saudi Arabia’s Sheikh Yamani used to point out, the Stone Age did not come to an end because we ran out of stone.
As for the alleged perils of biotechnology and genetic modification (which is simply an improved form of the age-old practice of the selective breeding of plants), if there was any substance to the fears of Frankenfoods, these practices would have stopped decades ago. What the green revolution has done is feed the world and reduce poverty on an unparalleled scale.
Other than for his unfortunate use of the term “liberal” to describe statists, I like this letter in today’s Wall Street Journal from Joe Boccuzzi ; it’s in response to a recent William Galston column on Hillary Clinton :
Mr. Galston parrots Mrs. Clinton with the classic union mentality that the employees “create wealth” for the company. Showing up for work doesn’t make one a wealth creator. Having someone tell you to flip a burger or turn a bolt on an assembly line doesn’t create wealth. If you have a “dime a dozen” type of job you shouldn’t be surprised that you are paid a dime. There are worker skills and education that bring value to a business, and those employees are usually well compensated without government intervention.
Business risk is anathema to those who speak about employee contributions to wealth. The employee gets his paycheck without risk of loss; the business (wealth) creator can lose substantially with business failure. Sharing the wealth for liberals doesn’t mean sharing the business risk. It is this loss of invested capital that justifies the wealth the creator of the business receives.
The liberal politician typically panders to union slogans about the oppression of the worker and the evils of “the rich” while they themselves are highly paid for work that involves little risk of loss.
That’s one reason I find the race to raise the minimum wage across the country so problematic. I understand the good intentions underlying it. But the idea that the minimum wage — at least for young workers — should be a “living wage” is absurd, even immoral. Employers are taking a risk when they hire people with no work experience. Why further discourage that?
Subsidize something and you get more of it. Tax it and you get less. There are plenty of ways to subsidize low-skill hiring — an expanded earned-income tax credit, for instance. Instead, a higher minimum wage taxes the employers who hire low-skill workers. That’s nuts.