- The Washington Times - Tuesday, October 30, 2007


In 1944, free-market economist Friedrich Hayek wrote “The Road to Serfdom” as a warning to liberal democracies like the United States and Great Britain. His argument, in a nutshell, was that state control of the economy would lead, in the end, to political tyranny.

Unfortunately, few politicians from either party seem to remember his warning. According to a recent Wall Street Journal poll, 59 percent of Republicans now believe free trade is bad for the American economy. The leading Democratic candidates for president sound even worse.

Almost everyone knows that Soviet-style state ownership of industry leads to disaster. But owning industry is only one way of controlling the economy. Sen. Hillary Clinton, Sen. Barack Obama and John Edwards are now competing to see who can offer more ways to put vast swaths of the economy under the control of the federal government. In their economic debate today, expect them to speak of economic security, equality and justice. Listen carefully, however, and you’ll hear competing blueprints for economic slavery.

Instead of creating prosperity and opportunity for the poor and overtaxed middle class, Mrs. Clinton’s plans for government-run health care would put 16 percent of the U.S. gross domestic product, and trillions of private decisions, under the command of a federal bureaucracy. We expect hundreds of cereal choices in the grocery store. Do we really want a bureaucrat in Washington deciding when we can have an appendectomy? Such are the daily indignities in countries with government-run health care.

Mrs. Clinton is also fond of the Keynesian tax-and-spend policies that were fashionable in the 1970s, but now, in this post-Reagan era, seem more appropriate in a museum. For the government to spend more money, it has to either raise taxes or borrow from someone else. That type of spending doesn’t create new wealth. Does anyone really believe that in this high-tech global economy, the federal government can make us prosperous by spending money it doesn’t have?

Mr. Obama’s “tax relief” for lower income brackets through taxing the so-called rich and investors is unjust, since it invites one group of citizens to vote for the government to confiscate the wealth of other citizens and give it to them.

Mr. Edwards’ divisive language of an “economic divide” and “two Americas” is cut from the same cloth. It’s the brainchild of left-wing elites, not the “Middle America” with which Mr. Edwards tries to identify on the campaign trail.

Messrs. Obama and Edwards’ proposals would punish investors and entrepreneurs who start businesses, which is the surest way to keep poor Americans poor.

Both recite the old chestnut of “the rich getting richer and the poor getting poorer.” But when an economy grows, the rich and the poor alike get richer. According to a Congressional Budget Office Report, between 1991 and 2005 it was the poorest fifth of Americans that saw the greatest increase in their earnings. And the poorest fifth don’t stay there for their entire lifetimes.

Both politicians appeal to obsolete class-warfare cliches. The goal is to pit the majority of Americans against mythological Wall Street fat cats getting rich while ordinary citizens struggle to make ends meet. What they forget is that the majority of middle-class Americans, including retirees, are investors through their 401k and retirement plans. So millions of ordinary Americans are now part of the “investor class.”

The Democrats’ outdated policies would degrade not just our economy, but our culture as well. Heavy state intervention in the economy usurps personal responsibility and creates a culture of dependency. When individuals lose the freedom to exercise their responsibility, many will eventually become irresponsible. To solve such problems, the Democrats would call for even more government involvement (it takes a village, after all) to cure the problem they caused in the first place.

America’s vitality is sustained by its free and responsible citizens, strong families, active houses of worship, vibrant civil society and free economy. These institutions have produced the greatest freedom and prosperity the world has ever seen. But we’re losing our way. What America needs is to return to the roots of its founding, not give the worn-out fantasies of liberal elites another try.

A free economy creates the space for people to live out their responsibilities, take care of their families and contribute to society. The economic plans of the top Democratic presidential candidates would lead to an America that is less prosperous, less virtuous and less free. All are offering one-way tickets down the road to economic slavery.

Michael J. Miller is director of programs and Jay W. Richards is director of Acton Media and research fellow at the Acton Institute.



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