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OpenMarket: Morality of Capitalism

  • Farewell to Our Friend, Leonard Liggio

    October 14, 2014

    We are saddened to hear our friend Leonard Liggio passed away this morning. Today, the liberty movement has lost an intellectual champion. The Competitive Enterprise Institute has lost a colleague and ally. And on a personal note, I have lost a reliable, ever-present partner since I first started working in this movement several decades ago. 

    Leonard was long the Don of the free market community. Realizing that CEI needed to move out of its infancy stage and expand its board of directors in the early 1990s, Fred Smith approached Leonard, who quickly agreed to serve on our team. He continued with that board role for nearly two decades, moving to emeritus status only last year. Leonard was whimsical in his conversation, grounded in his idealistic commitment, and often bemused by CEI’s temerity in translating classical ideas into actual reform. And, he was always supportive. ...

  • Billionaire Diversity: Foreign vs. Domestic

    September 17, 2014

    Brookings Institution scholar Darrell West, whose new book Billionaires: Reflections on the Upper Crust is being released later this week, has another intriguing graphic on the political influence of the extremely wealthy. Last week Brookings posted an interactive grid of the top players in domestic politics, the U.S. Billionaire Political Power Index. This ranking put Charles and David Koch predictably at #1, but followed by Michael Bloomberg and hedge fund manager/global warming activist Tom Steyer, with the likes of George Soros, Bill and Melinda Gates, Warren Buffett and Alice Walton filling out the rest of the list. As I pointed out...

  • Celebrate Billionaire Diversity

    September 12, 2014

    Darrell West, a Vice President at the Brookings Institution, has a new book coming out next week on the political influence of the very wealthy, titled Billionaires: Reflections on the Upper Crust. West has come up with a savvy promotional idea by assembling a list of the top 20 billionaires (and billionaire couples) ranked by political influence. Bloomberg TV had him on yesterday to discuss the list and Philip Bump at The Washington Post...

  • The American (Business) Revolution

    July 3, 2014

    On our nation’s 238th birthday, a flood of public events, political speeches, and TV specials will remind us of the courage of our colonial ancestors in throwing off the authoritarian government of King George III. The Revolutionary War sparked a movement for democratic government that spread rapidly, eventually serving as an inspiration to billions around the globe.

    But the separation from Great Britain was also a revolution for commerce. In the 1770s, American merchants and consumers labored under a burden of high taxes, administrative red tape, and punitive import duties. It was the passage of the Tea Act in 1773, which worsened that burden, which drove the patriots known as the Sons of Liberty to destroy the East India Company’s famous cargo during the Boston Tea Party.

    We often forget that the taxes and regulations on tea that the Sons of Liberty found so odious...

  • Adam Smith's Recommendation To End Illegal Immigration

    January 24, 2013
    Restrictions on immigration have created a black market in labor and movement. Currently, the U.S. government issues only 10,000 green cards to workers who lack higher education, special skills or family connections. These restrictions have incented (as opposed to “caused”) desperate workers from around the world to circumvent the legal process and enter or reside in the United States illegally. The lesson of this aspect of immigration policy is: Ignore the market at your own peril. Policy makers have little respect for this market. Adam Smith famously called the legislator “the man of system” who “seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon...
  • James Buchanan, 1919-2013

    January 9, 2013
    Economics has lost one of its greats. James Buchanan has passed away at age 93. Born on a Tennessee farm in 1919, he continued working as a farmhand to put himself through college, milking cows twice a day. From there he went on to a long and varied career, culminating in his being awarded the 1986 economics Nobel. He won that Nobel for his role in developing public choice theory. After the Prize Committee made its announcement, a flock of economically innocent reporters asked him to explain what the heck that was. They were astonished at his simple answer: it is applying the economic way of thinking to politics. It is treating politicians the same as everyone else -- self-interested, responsive to incentives, a bit vain, eager to please and be pleased -- flesh and blood human beings, basically. The reporters scoffed; why, that’s nothing more than common sense! Maybe so, he replied....
  • Remembering Elinor Ostrom

    June 12, 2012
    Among the individuals with whom I wish I could have greater opportunities to exchange ideas is Elinor Ostrom. She passed away today, and now I must pursue that conversation indirectly -- via her writings, her colleagues, and my recollections of those few conversations I did have the opportunity to enjoy.
  • Twenty Years without Hayek

    March 23, 2012
    F.A. Hayek died twenty years ago today. In his long career—his first book was published in 1929, his last in 1988—he made important contributions to economics, philosophy, and even psychology. He even won a Nobel Prize along the way. If there is a unifying theme to Hayek’s diverse body of work, it is an emphasis on intellectual humility. He was a dogged opponent of capital-C Certainty, and was always quick to remind would-be social engineers that there are limits to their knowledge. The unintended consequences of their grand plans are somewhat less limited. Hayek’s grandfather was a professor of natural science, and his father was a doctor who moonlighted in botany. As happens to many boys growing up in scientifically minded households, the young Hayek was fascinated with evolution. This would profoundly influence his economic thought when he grew up, especially his concept of...
  • CSR: Business's Shampoo?

    February 28, 2012

    To the Editor, Financial Times:

    Gillian Tett notes the vogue among CEOs for “corporate social responsibility” (When Making Shampoo Becomes a Service to Society). CSR is a response to those demanding business assume responsibility for ending pollution, poverty, income disparities, discrimination, and the other ills of the world. As Tett notes, charging business with CSR is a back-handed complement.  The critics have more confidence in business’s abilities than they do in governments’.  But, should business accept this assignment? Will the CSR shampoo really wash those attacks right out of business’s hair? Market tests say no.

    The marketing notion that the customer is always right -- useful in enhancing brand reputation -- has mistakenly been transmuted to...

  • The Compassion of Adam Smith

    October 14, 2011
    It's much more fashionable to attack Adam Smith these days than to read him. Yes, he favored economic liberalism, which wasn't exactly in style in his time. Nor is it in ours. History remembers him as cold and calculating. But in real life, he was neither. There are two main drivers behind Smithian liberalism, neither of them cold or calculating. One is that man is a social animal. The foundation of Smith's moral theory is the impartial spectator theory. People figure out the right thing to do by asking themselves if an impartial third party would approve of their actions. Empathy -- thinking of others and feeling for them -- is at the very heart of Smithian morality. Take trade, for example. Smith is well known for being an ardent free trader. But why? Because trade is an inherently peaceful act.It is moral. If you have something I want, I'm not going to hit you over the head and...

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