Listening to Mitt Romney in recent days a) support in perpetuity the job-killing minimum wage and b) forget that entrepreneurial capitalism lifts all boats… well, it left me a little frustrated. Not as frustrated as Barack Obama giving the Mandate of Heaven to tax increases and bigger government, but frustrated nonetheless. But maybe there are some things you don’t learn as a corporate turnaround artist or as a community organizer—or least don’t learn to express well. Important things.
Now, I know the campaign trail isn’t a great time to begin a heavy book-reading schedule, except for briefing books. And ideally a presidency shouldn’t be a time of great new learning. Rather, it should be a time when America’s leader draws upon a lifetime of learning and experience and applies them to the great challenges of the day.
But are here are five books on the value of free-market, Schumpeterian capitalism—all which can be found in the Pethokoukis Family Library (or last on the Pethokoukis Family Kindle)—both Romney and Obama should peruse:
1. Free to Choose | Milton Friedman and Rose Friedman
The Nobel Prize-winning economist explains how the free market not only makes society more prosperous at all levels, but also helps guarantee our liberty. Here is Uncle Miltie on the minimum wage:
Another set of government measures enforcing wage rates are minimum wage laws. These laws are defended as a way to help low-income people. In fact, they hurt low-income people. The source of pressure for them is demonstrated by the people who testify before Congress in favor of a higher minimum wage. … They are mostly representatives of organized labor, of the AFL-CIO and other labor organizations. No member of their unions works for a wage anywhere close to the legal minimum. Despite all the rhetoric about helping the poor, they favor an ever higher minimum wage as a way to protect the members of their unions from competition.
The minimum wage law requires employers to discriminate against persons with low skills. No one describes it that way, but that is in fact what it is. Take a poorly educated teenager with little skill whose services are worth, say, only $2.00 an hour. He or she might be eager to work for that wage in order to acquire greater skills that would permit a better job. The law says that such a person may be hired only if the employer is willing to pay him or her (in 1979) $2.90 an hour. Unless an employer is willing to add 90 cents in charity to the $2.00 that the person’s services are worth, the teenager will not be employed. It has always been a mystery to us why a young person is better off unemployed from a job that would pay $2.90 an hour than employed at a job that does pay $2.00 an hour.
The free-market system isn’t just economically superior to its competitors, but morally and spiritually, as well. Here, the great philosopher is speaking of religious leaders but could also be referring to the current American president:
Few theologians … understand economics, industry, manufacturing, trade and finance. Many seem trapped in pre-capitalist modes of thought . . . Many swiftly reduce all morality to the morality of distribution. They demand jobs without comprehending how jobs are created. They demand the distribution of the world’s goods without insight into how the store of the world’s goods may be expanded . . . They claim to be leaders without having mastered the techniques of human progress.
3. The Seven Fat Years | Robert L. Bartley
Obama didn’t seem to have a 1980s. More like two ’70s and then on to the ’90s. And Romney spent a good chunk of the Reagan years building Bain Capital. So maybe a review of the Reagan Revolution is in order for both men. And this look by the legendary Wall Street Journal editor at the start of the Reagan Long Boom is a great place to begin:
In the years before 1982, democratic capitalism was in retreat. Its economic order seem unhinged, wracked by bewildering inflation, stagnant productivity, and finally a deep recession. The diplomatic and military initiative lay with Communist totalitarianism, which proclaimed inevitable ideological victory and could send crowds into the European streets to protest efforts to offset its own shiny new missiles and tanks. Economic confusion and a sense of futility sapped the morale of the Western people. Leaders talked of a “malaise” in America and “Europessimism” across the Atlantic.
In a remarkably short time, all of this has been totally reversed. Today mankind reaffirms democratic capitalism as its role model
This compilation of columns from the 1990s by the CNBC host and Reagan administration economist is both a great primer on supply-side economics—or as I prefer to call it, “economics”—and an invigorating affirmation of the American Experiment and why free-market capitalism is the best path to prosperity:
It was Reagan and his Great Britain colleague Margaret Thatcher, who turned back the tide of Keynesian government fine-tuning and central planning, confronting the constant chorus of pessimistic criticism from distinguished Ivy League establishmentarians such as Samuelson, Modigliani, Solow, Tobin, Thureau, Galbraith, Kennedy and others who had wrapped themselves in the smug self-knowledge that economics could only be managed by distinguished university dons; free markets and the unfettered actions of ordinary people in commerce, trade, and finance was a dangerous thing, something that must be tightly controlled, lest it lead to chaos.
AEI’s president argues that limited government and a free economy are about far more than merely raising our economic standard of living:
It might seem that the best case for free enterprise is the material one. Free enterprise lets people make more money, buy more and nicer stuff, and have a greater degree of comfort. The freer our economy is, the more competitive the US economy is vis-à-vis the rest of the world. And so on. But these aren’t our best arguments. There is another reason, a transcendent reason, for which free enterprise matters most—and this is the case we all must be able to make today. We have to make the case for free enterprise and economic growth from a moral perspective, using language about opportunity and happiness and living a meaningful life.
That’s five. I could easily make a list of 50. But it’s a start.