In the early days of college football, the University of Chicago was a powerhouse. The school no longer competes at a high level on the gridiron, but it remains a force in the battle of economic ideas. This fall, while other universities pursue a national pigskin championship, the free-market “Chicago Boys” will face off against that “progressive” economic team from City Hall - the “Cronies.”
The University of Chicago boasts a long tradition of award-winning economists such as George Stigler, Friedrich Hayek and Milton Friedman. These scholars proved that individual freedom and prosperity could be expanded by reducing regulatory obstacles and trimming government bureaucracy.
The principles they expounded worked here and overseas. Free-market economics in the 1970s, for example, helped Chile become the only developed country in South America.
But City Hall celebrates a much different tradition. Guided by father-son Mayors Richard Daley, the Cronies play a top-down, grind-them-down economic game. Their approach features plenty of heavy hitting and a lot of sneaks. On game days, the Cronies prefer that the referees come exclusively from their bench.
It may sound smart, but it’s not a winning strategy. It’s essentially the same game plan followed by other losing teams, from Russia’s notorious Oligarchs to Venezuela’s Shoutin’ Chavistas. No surprise, then, that since the Cronies moved up to D.C.’s Division 1 level, the strategy has failed miserably.
The Cronies began last season with great promise. Led by their rookie sensation Barack Obama and veteran players such as Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi, they won legislative scrimmage after legislative scrimmage. Following Coach John Maynard Keynes’ old playbook, they rapidly pushed tons of “stimulus” money down the field, raising hopes of creating or even just saving jobs. But they never scored an economic recovery.
This year, the team’s prospects have dimmed. It has spent the offseason telling people that its playbook is a winner and it’s the market that’s not working. But the fans don’t seem to be buying it. Instead of getting angry at the capitalist system, fans seem to be blaming the Cronies’ botched play-calling.
Of course, government-dominated economic systems never produce success - they just punish it. In many parts of the globe, aspiring entrepreneurs, who are willing to work hard and are full of ideas and energy, go up against a stacked deck because they lack political or family connections. Bureaucrats enjoy monopoly power, dictate pricing and conditions of service, and often become extravagantly rich while holding down millions of their countrymen.
To get ahead based on sheer merit and hard work, entrepreneurs need rules of the game that maintain nondiscriminatory markets, allocate credit impartially and allow individuals to reap - and keep - the rewards of their labor. That is the playbook for economic success developed by the Chicago Boys.
The fans are catching on. Government intrusions into the private sector as a partner, financier or outright owner are morally hazardous and toxic to economic freedom. Such special-interest arrangements directly contradict the principles of freedom, incentives and opportunity detailed in the Heritage Foundation’s Index of Economic Freedom.
When the collective decisions of the marketplace are overridden by government regulations, price-setting or even direct control or state ownership of natural resources by a burdensomely expensive and meddlesome bureaucracy, then “the system” is something quite distinct from free-market capitalism. At that point, it acts as the enemy of the common citizen.
In the past two years, policymakers have expanded government’s role in the U.S. economy through serial stimulus packages, “cash for clunkers,” automaker bailouts and other mega-spending programs that favor special-interest groups with strong political connections to federal power brokers.
Such favoritism is the very definition of cronyism - a form of deviant economic behavior that sucks the fairness, competition and vitality out of capitalist systems everywhere.