Free To Choose: a personal Statement

The Power of the Market
37
to the YMCA and YWCA, from the Indian Rights Association
to the Salvation Army, dates from that period. Voluntary coopera-
tion is no less effective in organizing charitable activity than in
organizing production for profit.
The charitable activity was matched by a burst of cultural
activity—art museums, opera houses, symphonies, museums, pub-
lic libraries arose in big cities and frontier towns alike.
The size of government spending is one measure of govern-
ment's role. Major wars aside, government spending from 1800
to 1929 did not exceed about 12 percent of the national income.
Two-thirds of that was spent by state and local governments,
mostly for schools and roads. As late as 1928, federal govern-
ment spending amounted to about 3 percent of the national in-
come.
The success of the United States is often attributed to its
generous natural resources and wide open spaces. They certainly
played a part—but then, if they were crucial, what explains the
success of nineteenth-century Great Britain and Japan or twen-
tieth-century Hong Kong?
It is often maintained that while a let-alone, limited govern-
ment policy was feasible in sparsely settled nineteenth-century
America, government must play a far larger, indeed dominant,
role in a modern urbanized and industrial society. One hour in
Hong Kong will dispose of that view.
Our society is what we make it. We can shape our institutions.
Physical and human characteristics limit the alternatives available
to us. But none prevents us, if we will, from building a society that
relies primarily on voluntary cooperation to organize both eco-
nomic and other activity, a society that preserves and expands
human freedom, that keeps government in its place, keeping it
our servant and not letting it become our master.

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CHAPTER 2
The Tyranny
of Controls
In discussing tariffs and other restrictions on international trade
in his
Wealth of Nations,
Adam Smith wrote:
What is prudence in the conduct of every private family, can scarce
be folly in that of a great kingdom. If a foreign country can supply
us with a commodity cheaper than we ourselves can make it, better
buy it of them with some part of the produce of our own industry,
employed in a way in which we have some advantage. . . . In every
country, it always is and must be the interest of the great body of the
people to buy whatever they want of those who sell it cheapest. The
proposition is so very manifest, that it seems ridiculous to take any
pains to prove it; nor could it ever have been called in question, had
not the interested sophistry of merchants and manufacturers con-
founded the common sense of mankind. Their interest is, in this
respect, directly opposite to that of the great body of the people.
i
These words are as true today as they were then. In domestic as
well as foreign trade, it is in the interest of "the great body of the
people" to buy from the cheapest source and sell to the dearest.
Yet "interested sophistry" has led to a bewildering proliferation of
restrictions on what we may buy and sell, from whom we may buy
and to whom we may sell and on what terms, whom we may em-
ploy and whom we may work for, where we may live, and what
we may eat and drink.
Adam Smith pointed to "the interested sophistry of merchants
and manufacturers." They may have been the chief culprits in his
day. Today they have much company. Indeed, there is hardly one
of us who is not engaged in "interested sophistry" in one area or
another. In Pogo's immortal words, "We have met the enemy and
they is us." We rail against "special interests" except when the
"special interest" happens to be our own. Each of us knows that
what is good for him is good for the country—so our "special
interest" is different. The end result is a maze of restraints and
restrictions that makes almost all of us worse off than we would
38

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