Steve Forbes - Freedom Manifesto: Why Free Markets Are Moral and Big Government Isnt

How Capitalism Will Save Us: Why Free People and Free Markets Are the Best Answer in Todays Economy ( WITH E LIZABETH A MES )

Flat Tax Revolution: Using a Postcard to Abolish the IRS

A New Birth of Freedom: Vision for America

Power Ambition Glory: The Stunning Parallels Between Great Leaders of the Ancient World and Today and the Lessons You Can Learn ( WITH J OHN P REVAS )

Copyright 2012 by Steve Forbes and Elizabeth Ames

All rights reserved.
Published in the United States by Crown Business, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York. www.crownpublishing.com

CROWN BUSINESS is a trademark and CROWN and the Rising Sun colophon are registered trademarks of Random House, Inc.

Library of Congress Cataloging-in-Publication Data
is available upon request.

eISBN: 978-0-307-95159-5

Jacket design by Michael Nagin
Jacket photograph Win Initiative/Getty Images

v3.1

To those visionary individuals who understand
the moral foundations of free markets and
courageously fight for them

O UR GOAL in this book is to turn conventional wisdom on its head and explain why the free markets of democratic capitalism occupy the moral high groundwhy economic freedom is the best way to a moral society based on our cultures Judeo-Christian values, rooted in the Golden Rule and the Ten Commandments.

The nation has reached a turning point. In the media, in the classroom, and at the dinner table, debates are raging over health care, energy, entitlements, educationthe future of America. They all come down to a single question: What kind of society do we want to be?

To put it another way: What best serves the public goodfree markets or Big Government?

Until recently, most Americans would have answered Big Government. Since the 1930s, the perception that President Franklin D. Roosevelts social welfare programs and massive intervention in the economy rescued the nation from the Great Depression has fostered the belief that Big Government is a prerequisite for a humane society. Calls for more government are almost always couched in morality rhetoric. Big Government is synonymous with compassion, the only way to protect against the destructiveness of markets, the way to provide genuine security and a safety net for the less fortunate.

Free, unfettered markets, in contrast, have been viewed as cold, amoral, and uncaringthe primary cause of most economic and social ills. Commerce gets blamed even when the cause of the problems is government.

We saw this during the financial crisis and recession. The collapse of the housing market was the end result of decades of well-intentioned but ultimately misguided Big Government policies and decisions. But in the emotional aftermath, the private sector was largely seen as the culprit. The epidemic of home foreclosures that preceded the crisis was blamed on predatory lending. The 2008 stock market crash was entirely the fault of greedy Wall Street shortsellers who had driven bank stocks into a death spiral. Meanwhile, free market solutionssuch as breaking up and privatizing Fannie Mae and Freddie Mac, the government-created mortgage giants that had helped to fuel the lending maniawere never seriously considered by either policymakers or media commentators.

Even its supporters can have a hard time articulating why free enterprise is moral. During a panel discussion in 2010 at Freedom Fest, an annual gathering of libertarians, a young man raised his hand and said that he had no problem explaining the economic benefits of free markets. Far more difficult, he admitted, was making the moral argument. Despite being passionate enough to attend a conference on economic freedom, he was hard-pressed to articulate the moral virtues of Americas economic systemone that has created the wealthiest society in history and attracted millions of immigrants seeking to realize their dreams in the land of opportunity. During the GOP presidential primaries, contenders like Mitt Romney and Newt Gingrich were reluctant to defendand wholeheartedly embracethe moral virtues of capitalism.

This fundamental belief in Big Government as an unassailable moral force has helped drive government on all levels to a size unprecedented in our historyfrom less than 10 percent of GDP in 1929 to over 35 percent today.

None of this has brought about a full economic recovery or led to a more humane, or for that matter, a more contented society. Indeed, the nation is, in the view of many, more polarized than ever before. Instead, something else is occurring.

U.S. polls show a new uneasiness with government. A 2011 Gallup poll found that a historic 81 percent of Americansmajorities of both Democrats and Republicanswere dissatisfied with the way the nation was being governed. But even more significant, according to the polling organization, 49% of Americans believe the federal government has become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens. In 2003, less than a third (30%) believed this.

A growing number of economists, historians, and commentatorsalong with everyday citizensare questioning Depression-era orthodoxies. Theyre recognizing that overly large and bureaucratic government is anything but a force for compassion. Its not the cure but the cause of critical problems plaguing the economy and society. A consensus is emerging: The only way to a truly fair and moral society is through economic freedomfree people and free markets.

This book will explain what is driving this shift in attitudes, the growing perception that free markets are moral and Big Government isnt.

I RONICALLY, THIS disillusionment with Big Government comes during an administration that has sought to embody the ideal of compassionate government more aggressively than any other in recent memory. Swept to office by an anxious electorate after the stock market crash of 2008, Barack Obama was heralded as a new FDR. A now famous cover of Time magazine depicted him in Roosevelts iconic pose: chin jutting outward, with hat and spectacles, cigarette in its holder. The president immediately set about engineering his spectacular expansion of governmentas Time called it, his New New Deal. He resorted to political payoffs to ram through a reluctant Congress the Patient Protection and Affordable Care Act (a.k.a. Obamacare). At this writing, the Supreme Court has yet to rule on this unpopular law. But if allowed to stand, in part or in full, its 2,700 pages of rules and regulations give government new and unprecedented powers over health insurers and providers, and the medical treatment of individuals.