Milton Freidman To The Rescue!

I am appalled at the thousands of regulations that have affected the ability of people to start small businesses. In this morning’s WSJ Thomas Stemberg, founder of Staples, writes “Nearly 30 years ago, I started a company called Staples, Inc. that went on to do pretty well.” He then continues to argue that it may not have been the case if the amount of regulations currently in place were in existence 30 years ago. “All told American businesses face 46, 758 pages of rules to live by.”  Stemberg ends his wonderful article by saying, “In 1986, we founded Staples in large part because of what used to be an enormously productive American financial system. The system that fueled entrepreneurship 25 years ago is now being regulated to death under the Dodd-Frank financial overhaul, which requires as many as 398 new regulations.” He then emphasizes his comments with “The next Staples, and its 50,000 jobs, may not happen because of this burden.”

Scary stuff, but business kind of brought this on itself. We as managers and business people need to take some level of responsibility for this because of how we did business. “Business ethics is considered by some as an oxymoron, much like jumbo shrimp.” However, that said our government’s attempt to regulate and attain some level of wealth redistribution is having the opposite affect than what they had hoped. Thus, Milton Freidman to the rescue.

I read two Freidman comments this morning that I think we need to ponder. First, “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get both.” Whether it is business regulation, NSA surveillance, or stop and frisk the break down of our personal freedoms should alarm us.

The second Freidman quote should motivate our thinking powers. “In 1960, the earliest date for which I have been able to get statistics, the average per capita income in Hong Kong was 28 percent of that of Great Britain; by 1996, it had risen to 137 percent of that in Britain. In short, from 1960 to 1996, Hong Kong’s per capita income rose from one-quarter of Britain’s to more than a third larger that Britain’s.”

What can we learn from this? Barry Asmus in his book “The Poverty of Nations” states, “All of these nations [like Hong Kong] have risen from poverty to increased prosperity through the same process: continually creating more goods and services.” This equates to more jobs and ultimate more per capita income.

I think we need to heed from Freidman has to say. If, as authorities have announced, poverty has decreased in the world by 50%, then we need to review how that happened. I think we will find that what Freidman said was create. We’ll see increased freedom and increased opportunity to create goods and services providing value for society. I hope our country does not degenerate to the point where we need revitalization in this area of philosophy.

And that is my thought for the day!

 

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