Americans are rightfully skeptical of "economic development." From India to Egypt to Brazil, it has meant Aswan Dam-size government projects that have failed to raise living standards while generating pollution and cultural instability.
Free-market economic development is entirely different.
This past baseball season promised to be the most exciting in my lifetime. Then the players' union opposed the owners' demand for a salary cap and refused to work. Baseball struck out. In the battle over blame, the most curious call is the union's for a "free market." The most often-cited remedy is to remove the owner's antitrust exemption.
The international diamond cartel, the most successful cartel in history, far more successful than the demonized OPEC, is at last failing on hard times. For more than a century, the powerful DeBeers Consolidated Mines, a South African corporation controlled by the Rothschild Bank in London, has managed to organize the cartel, restricting the supply of diamonds on the market and raising the price far above what would have been market levels.
Labor unions are flexing their muscles again. Last year, a strike against the New York Daily News succeeded in inflicting such losses upon the company that it was forced to sell cheap to British tycoon Robert Maxwell, who was willing to accept union terms. Earlier, the bus drivers' union struck Greyhound and managed to win a long and bloody strike. How were the unions able to win these strikes, even though unions have been declining in numbers and popularity since the end of World War II?
Poor IBM. Apparently big isn't necessarily better in the relatively free computer market. How will IBM ever get the public to buy its fancy, expensive personal computers or pick its new operating system? How can IBM stop ACE?
Sometimes it seems that our entire apparatus of economic education: countless courses, students, professors, textbooks, backed up—in the case of oil pricing—by a decade of experience in the 1970s, is a gigantic waste of time. Certainly it seems that way when we ponder the near-universal reaction to the Kuwait crisis.
Any business owner whose employees deliberately set out to harass and even endanger customers could do only one thing: fire the offenders, and maybe sue them for damages as well. Nothing else would be compatible with free-enterprise and private property. But thanks to a whole host of government interventions, unionized companies like Eastern Airlines cannot take the actions that morality and economics would dictate.
Mark Shields, a columnist for the Washington Post, recently wrote of President Reagan's "blind devotion to the doctrine of free trade." If President Reagan has a devotion to free trade, it must be blind because he has been way off the mark. In fact, he has been the most protectionist president since Herbert Hoover.
Mises University is the world’s leading instructional program in the Austrian school of economics.
Mises University is the world’s leading instructional program in the Austrian school of economics.
