The Road to Freedom Read online

  corporate cronyism, 3, 18, 64, 149

  corporate taxes

  high, 104–106, 167

  loopholes in, 171

  reduction of, 144, 157, 168–169

  See also taxation

  Council of Economic Advisers, 62

  culture of envy, 56, 60

  culture wars, 8

  Current Population Survey, 61

  Daily Caller, 84

  Declaration of Independence, 10, 25

  defined benefits vs. defined contributions, 165

  Democracy in America (Tocqueville), 134–135

  democratic capitalism. See capitalism

  dependence, 15–16, 30–31, 39–40

  discretionary spending, 156–157

  dissatisfaction, 3–4, 9–10, 97

  Dodd-Frank Act. See Consumer Protection Act

  earned success

  fairness and, 50–51

  free enterprise and, 33, 41, 147–148, 173–175

  happiness from, 24–26, 31

  measurement of, 27–28

  sacrifice and, 35–38, 175

  work ethic and, 31–35, 55–58

  Easterlin Paradox, 21

  Easterlin, Richard, 21

  Easterly, William, 74

  Eastern artistic approach, 113–114

  economic efficiency, 9, 45, 116, 166

  Economic Freedom Index, 74–75

  economic growth

  charity and, 86

  declining, 108–110, 142–143

  facts regarding, 142–143

  moral argument for, 141–142

  opposing strategies for, 143–144

  policy measures for, 144–147

  in social democracies, 101

  elderly. See senior citizens

  employer contributions, to health premiums, 170–171

  Employment Impact Statement, 151–152

  entitlement programs

  core principles, 159

  facts regarding, 158–159

  moral issue of, 157–158

  President Johnson and, 99–100

  reducing, 10, 153–154, 155–156

  spending increases and, 101

  See also welfare states

  The Entrepreneur’s Guide to Finance and Business (Rogers), 37

  entrepreneurship

  choice of, 173–175

  economic growth from, 62

  government encumbrance of, 143–144

  happiness associated with, 19–20

  heavy taxing of, 104–106

  job creation and, 147–148

  sacrifices/failures of, 36–37

  envy, 18, 56, 60

  epistemic error, of materialism, 28

  equal opportunity, 58–59. See also opportunity society

  equal outcomes, 47–48

  estate tax. See taxation

  Europeans

  charity and, 82

  happiness of, 35

  income redistribution and, 59–60

  work attitudes, 33–34

  externalities, 122–125

  failure, entrepreneurship and. See entrepreneurship

  fairness

  definitions of, 47–48

  income redistribution and, 51–52

  moral value of, 45–47

  ultimatum game, 48–50

  Fannie Mae, 39

  Federal Employees Health Benefits Program, 165

  Federal Housing Administration, 98

  federal income taxes. See taxation

  Federal Reserve, 98

  Federal Trade Commission, 98

  federal workforce, 150, 157

  food aid programs, 118

  food stamps, 99, 118

  The Forgotten Man (Shlaes), 99

  Fortune 500, 124

  Fox News, 117

  Franklin, Benjamin, 114

  Freddie Mac, 39

  free enterprise

  aiding underprivileged, 88–89

  charity and, 81–85

  choice of, 173–175

  conversion to, 17–18

  criticisms of, 68–69, 80–81

  earned success and, 33, 41, 147–148

  economic growth and, 77–80, 143–144

  embrace of, 96–97

  evidence for success of, 72–76

  features of, 6, 33

  income inequality and, 45

  materialistic/moral arguments, 8–10

  moral basis of, 10–12, 14, 18, 64–65, 172

  undermining of, 7, 97

  See also capitalism

  freedom, moral issue of, 10–12

  Friedman, Benjamin, 141–142

  Friedman, Milton, 48

  Fromm, Erich, 31

  Gallup Poll, 19

  GDP (gross domestic product)

  charity linked to, 86

  entitlements and, 158

  federal debt relative to, 106–108, 153

  government spending and, 5, 101–102, 153

  historical perspective, 70, 71

  Korean, 74, 75

  life expectancy and, 75–76

  necessary growth of, 142–143

  policy uncertainty and, 146

  General Motors, 39, 63

  General Social Survey, 16, 21–22, 25, 29, 55, 83

  generosity. See charity

  good luck. See luck

  Good Samaritan parable, 67–68

  Gorbachev, Mikhail, 14

  Gordon, Robert, 61

  government

  aiding underprivileged and, 89

  dissatisfaction with, 3–4, 9–10, 97

  flood insurance and, 39, 118

  income redistribution and, 63, 82–84

  limiting involvement of, 137–138, 174–175

  role of, 64–65, 115–116

  safety net, 116–119, 174

  government intervention

  in externalities, 122–125

  in information asymmetries, 126–128, 129

  limiting charity, 87–88, 136–137

  market failure justifying, 128–132

  in monopolies, 119–122, 129

  in public goods, 125–126, 129

  government spending

  cuts to, 153–157

  economic growth and, 108–110, 145–146

  increase in, 5–6, 101–102

  government-sponsored enterprises (GSEs), 39

  Great Depression, 98–99

  Great Divergence, 70–72

  Great Society programs, 97, 99–100

  Greece, 6

  green jobs initiatives, 150

  gross domestic product. See GDP (gross domestic product)

  growth. See economic growth

  Haidt, Jonathan, 44, 46

  happiness

  charity and, 86–87

  in earned success, 24–26

  of entrepreneurs, 19–20

  job satisfaction and, 34–35

  money and, 20–24, 28–30

  pursuit of, 10–11, 20

  Hayek, Friedrich, 5, 116

  Head Start program, 99

  health care premiums, 170–171

  health care reforms, 7, 164–165

  health insurance companies, 127, 129

  hedonic treadmill, 23–24

  helplessness, learned. See learned helplessness

  Henrekson, Magnus, 108

  high-speed rail, 129

  homeless shelters, 88, 118

  housing crisis, 129, 144–145

  ILO (International Labour Organization), 108

  immigration

  earned success and, 56–57

  policy reform, 146–147

  immorality, of welfare system, 15–16

  income. See money

  income inequality

  exaggeration of, 61–62, 78

  free enterprise and, 45

  redistributive fairness, 48, 51–52

  income mobility, 53–57

  income redistribution. See redistributive fairness

  Industrial Revolution, 70–72

  information a
symmetries, 126–128, 129

  intellectual property, 120–121

  International Labour Organization (ILO), 108

  intervention, government. See government intervention

  Japan, post–World War II, 21

  Jefferson, Thomas, 10, 11, 15, 52, 115, 116

  job creation

  core principles, 148–149

  government growth and, 150

  government intervention in, 151–152

  moral argument for, 147–148

  unemployment statistics, 148

  unionization and, 150–151

  job satisfaction, 34–35

  Johnson, Lyndon B., 97, 99–100

  Johnson, Robert, 27

  Kipling, Rudyard, 64

  Korea, 74, 75

  Lady Gaga, 120–121

  Laffer Curve, 168–169

  Laffer, Arthur, 168

  learned helplessness, 15–16, 30–31, 39–40, 175

  life expectancy, GDP and, 75–76

  Lincoln, Abraham, 57

  loans, housing, 145

  Locke, John, 10–11

  Losing Ground (Murray), 15

  lotteries

  state government, 121–122

  winners of, 22–23

  lower class, 57, 82, 88–89

  luck, 53, 55–56, 58–60

  Madoff, Bernie, 69

  male midlife crisis, 29

  Mao Tse-tung, 73, 113

  Marcus, Bernie, 36, 37

  market failures

  externalities, 122–125

  government intervention in, 128–132

  information asymmetries, 126–128, 129

  monopolies, 119–122, 129

  public goods, 125–126, 129

  social capital for, 132–134

  The Market for ‘Lemons’ (Akerlof), 127

  Mason, George, 10

  materialism

  falsity in, 28–30

  Founders’ shift away from, 11

  free enterprise and, 8–10

  McGovern, George, 57–58

  Medicaid

  appropriate function of, 118

  excessive expense, 100, 163

  reforming, 164

  Medicare

  appropriate function of, 117

  excessive expense, 100, 164

  facts regarding, 158–159

  reforming, 155–156, 164–165

  merit, in ultimatum game, 50–51

  meritocratic fairness

  defined, 47–48

  embrace of, 63–64

  example of, 50–51

  luck vs., 58–60

  moral foundation of, 52–58

  Microsoft, 120

  middle class, 57, 117, 118, 161

  Milwaukee Co-operative Milk Producers, 40

  minimum safety net, 116–119, 174

  Mischel, Walter, 37

  money

  earned by poorest citizens, 76–77

  happiness and, 20–24

  measurement of success, 27–28

  materialism and, 28–30

  unequal distribution of, 51–52

  world distribution of, 72

  money-back guarantees, 128

  monopolies, 119–122, 129

  moral arguments

  economic growth, 141–142

  entitlement programs, 157–158

  of Founders, 10–11

  free enterprise, 8–10

  job creation, 147–148

  national debt, 152

  rational justification for, 44–45

  reactions to, 44–45

  Soviet Union, 14

  tax code reform, 166

  Tunisian revolution, 12–13

  welfare reform, 14–16

  The Moral Basis of a Backward Society (Banfield), 135

  mortgage interest, 170–171

  Murray, Charles, 15–16

  Nader, Ralph, 84

  National Bureau of Economic Research, 38, 122

  national debt

  core principles, 153–154

  discretionary spending, 156–157

  entitlement reduction, 155–156

  facts regarding, 153

  federal workforce and, 157

  history of, 4–5

  increase in, 106–108

  moral issue of, 152

  national defense, 125

  National Flood Insurance Program, 39

  National Labor Relations Board (NLRB), 98, 151

  National Palace Museum, 113

  National Recovery Administration (NRA), 99

  NBC News, 96, 102

  negative effects, of welfare system, 15–16

  New Deal, 97, 98–99

  New York Times, 7, 30

  1984 (Orwell), 25

  Novak, Michael, 72

  Obama, Barack, 27, 39–40, 103, 115–116, 129, 144, 149, 150, 151, 156, 166, 170

  ObamaCare, 4, 7, 132, 146, 149

  Occupy Wall Street demonstrations, 3, 39, 45, 61, 79–80

  Ohio State University, 25

  Okun, Arthur, 62

  opportunity cost, 80–81

  opportunity society

  America as, 53–58

  economic growth for, 142

  moving away from, 60

  See also equal opportunity

  Orwell, George, 25

  Panel Study of Income Dynamics, 54

  Pelosi, Nancy, 47–48

  Perry, Mark, 53–54

  policy measures

  for economic growth, 144–147

  impact on employment, 151–152

  pro-union, 150–151

  poverty

  economic growth and, 142

  free enterprise and, 72–74, 76–77, 80

  prescription drugs, 117, 118

  price fixing, 120

  price inflation, 161

  productivity

  capitalism and, 9

  earned success and, 31–33

  penalizing, 31, 104–106, 166

  redistribution and, 62–63

  profit, in earned success, 24–25

  progressive taxation. See taxation

  property, 10–11

  prosperity

  charity and, 85–86

  opportunities for. See opportunity society

  pro-union policies, 150–151

  public goods, 125–126, 129

  punctuality, 83–84

  punishments, taxation as. See productivity

  pursuit of happiness, 10–11, 20, 29, 40, 41, 142

  Putnam, Robert, 136

  rational justification, for moral reactions. See moral arguments

  Reagan, Ronald, 14, 99, 107

  redistributive fairness

  charitable donations and, 82–83

  defined, 47–48

  disconnection from merit, 59–60

  experiment in, 51–52

  language of morality and, 9

  unfairness of, 61–63

  reform

  entitlement, 153–154, 155–156

  health care, 7, 164–165

  Medicaid, 164

  regulatory, 145

  Social Security, 160–162

  tax code, 144, 146, 151

  welfare system, 14–16

  regulatory barriers to business, 104–106, 143–144

  retirement

  raising age for, 160

  savings, 162

  rewarding merit. See meritocratic fairness

  road to serfdom

  for Americans, 5–6

  factors leading to, 7

  The Road to Serfdom (Hayek), 116

  Rogers, Steven, 37

  Roosevelt, Franklin D., 15, 97, 98–99

  Rubio, Marco, 69

  sacrifice

  in earned success, 36–38

  welfare state and, 38–40

  safety net

  necessity of, 9, 51, 64, 89, 116, 174

  appropriate function of, 116–119, 159,

  reform of, 158, 161, 162

  Schumpeter, Joseph, 27

&
nbsp; Schwab, Charles, 36

  selfishness, of collectivist views, 81–85

  self-sufficiency, 16

  Seligman, Martin, 30

  senior citizens

  adequate care for, 162

  Medicare and, 164–165

  Social Security and, 118, 158, 161

  Sherman Antitrust Act, 120

  Shlaes, Amity, 99

  Sidi Bouzid, 12

  Sixteenth Amendment, 101

  Smith, Adam, 11–12, 23, 62, 119, 120

  social capital

  in America, 134–136

  government funding and, 136–137

  market failure and, 132–134

  social democracies

  economic decline in, 108–110

  features of, 100–101

  penalizing productivity, 104–106, 166

  potential of, 5–6

  shift toward, 97

  See also collectivist views

  social engineering, 114, 132, 167

  Social Security

  facts regarding, 158–159

  limiting, 96, 117, 118

  reform of, 155–156, 160–162

  Retirement Earnings Test, 162

  social status, 34

  Solyndra, 150

  soul, of work, 31–33

  Soviet Union, 14

  Spanish Socialist Workers Party, 101

  Spain, 6, 89

  SSI (Supplemental Security Income), 118

  Stalin, Josef, 25

  Standard Oil, 120

  statism

  eroding social capital, 136–137

  free enterprise vs., 6

  morality and, 9

  negative effects of, 88–89

  shift toward, 97–100

  stimulus

  package, 4, 132, 148, 150, 151

  spending, 63, 86, 98, 143, 173

  stock market crash (2008), 3

  stress, 16, 85, 87, 122

  subsidiarity, 137

  subsidies, 145, 150, 156–157, 171

  success

  earned. See earned success

  sacrifice in, 36–38

  Supplemental Security Income (SSI), 118

  TANF (Temporary Assistance for Needy Families), 118

  Tame Duck (Kaufman), 40–41

  Tax Foundation, 103

  taxation

  American vs. European, 34

  complexity of tax system, 167

  consumption, 171–172

  core principles, 167–168

  corporate. See corporate taxes

  estate, 57–58

  facts regarding, 166–167

  federal income, 101, 102–103, 144

  loopholes, 170–171

  measuring success and, 26

  moral issue of, 166

  penalizing productivity with, 104–106, 166

  personal reductions, 169–170

  progressive, 102–104, 160

  redistributive fairness and, 48

  reforming, 144, 146, 151, 157, 168–172

  in social democracies, 100–101

  social security and, 160

  unearned punishment, 31

  taxi medallions, 121

  Tea Party rally, 3

  teenage unemployment, 147–148

  Telefónica, 121

  Temporary Assistance for Needy Families (TANF), 118

  Thatcher, Margaret, 107

  The Home Depot, 36

  The Theory of Moral Sentiments (Smith), 11