(This article is adapted from a speech Michigan View.com editor Henry Payne gave Tuesday at a joint Northwood University-Mackinac Center forum celebrating 100 years of Milton Friedman.)
You know who Steve Jobs is – not to mention the iPhone, iPod, iPad. You may also know his Apple cofounder, Steve Wozniak
But do you know who Mike Markkula is?
Wozniak will tell you that Mike Markkula is the most important man in Apple’s history after Steve Jobs. Indeed, you may never have heard of the two Steves were it not for Markkula. Why? Because the California One Percenter was Apple Computer’s first investor waaaay back in 1977. He gave $250,000 to two poor, struggling, 99 Percent entrepreneurs working out of a garage so that they had the capital necessary to build computers. Mike Markkula is the capitalism behind Apple Computers.
There are thousands of Mike Markkulas out there – individual investors, small banks, big banks, small private equity firms like Detroit’s Huron Capital, big private equity firms like Boston’s Bain Capital, all looking for the next big thing that will better serve America’s consumers.
They are all capitalists. And they are Milton Friedman’s heroes.
July 31 would have been Friedman’s 100th birthday. There is never a bad time to honor the free market’s greatest champion and the fundamentals of what have become known as classical economics. But now is a particularly good time because, for the last four years, the current crowd in the White House has pursued the antithesis of Friedmanomics – market socialism.
President Obama’s market socialist model believes that government drives growth – that government officials like himself know the future. The model stipulates that a handful of government bureaucrats are a better substitute for the thousands of capitalists in their messy, competitive pursuit for the next great product. If you are as smart as Barack Obama – and you already know what the future is – then why shouldn’t government go all in for it? Why leave the field to the chance that vulture capitalists will put their money on the wrong garage hippies?
After all, recognized entrepreneurs like Henrik Fisker already have electric cars like the Fisker Nina ready to go. Ready to save the planet from global warming. So what if he can’t find capital in the private market? Barack Obama understands his vision.
And so Obama took some $60 billion in taxpayer money in 2009 and bet it all on green energy companies like Fisker Automotive.
He did this despite the fact that most economists today recognize that Milton Friedman was right- market socialism is a failure.
Sure enough, most of the companies that got millions from Uncle Barack have gone belly-up or suffered huge loses because there is no consumer market for their products: Solyndra, Ener1, Beacon Power, A123 Systems, Evergreen, Fisker, and so on. Obama compounded his error by spending another $700 million on other projects while reforming the health care system to be government run. The result has been the worst U.S. economic recovery out of a recession since World War 2.
By a lot.
But if this was such a predictable failure, why did Barack Obama pursue the economics of the past?
I spoke recently with Pat Anderson, on of Michigan’s top economists, and asked him when the economics profession had arrived at a consensus that Friedman was right. Pat said the consensus for free markets hardened in the let 20th century after the failures of Russian socialism, European market Socialism, and the failure of Big Government spending in the U.S. in the 1960s and 1970s – putting the U.S. in such a big hole economically that only the timely free market economics of the Reagan administration could save it.
And who was one of Reagan’s key economic advisors? Milton Friedman.
Still the question lingers: Why did Obama enact failure? Because we continue to live the eternal human struggle: Government vs. the individual. The state vs. the consumer. There will always be institutions vested in promoting Big Government. Politicians promote government because it gives them more power. Individual companies/industries – like Fisker – want more government to tilt the playing field in their favor.
And then there is America’s mainstream media – always eager to provide a megaphone for Big Government pols like Barack Obama.
Milton Friedman understood the power of media. He knew that free market capitalism is the most successful system in the history of the world. He knew why the United States was the most prosperous nation on earth. But he also knew that unless Americans understood the concept of economic liberty – they would lose it.
So this balding, 5′-tall man became an unlikely media celebrity in order to celebrate the free market.
He had a weekly column in liberal Newsweek magazine from 1966-1984. He produced a 10-part PBS series on the government-run, liberal network called “Free to choose.” He wrote countless articles in popular publications and made countless appearances on popular liberal programs like Phil Donahue to spread the word.
His media legacy lives today. Even without Friedman around, there is a media revolution that communicates economic freedom louder than ever. Thanks to Internet entrepreneurs and their investors, Americans have access to a wider range of media than ever. The Internet has broken the monopoly of the pro-government network media and large newspapers (a monopoly Friedman battled all his life). Today, media like The Michigan View.com, Mackinac’s Capitol Confidential, The Drudge Report, National Review Online, The Daily Caller, and Fox News communicate the importance of free market economics.
Happy birthday, Milton Friedman.