Contrast that with what Yergin describes as a “petro-state,” one of the countries that has nationalized its oil.
“The most important ‘business’ in the country (aside from oil production itself) is focused on getting some of the ‘rents’ from oil—that is, some share of the government’s revenues,” he writes. “The economy becomes inflexible, losing its ability to adapt and change. Instead, as the edifice of the state-controlled economy grows, so do subsidies, controls, regulations, bureaucracy, grand projects, micromanagement—and corruption.”
In his book, We Still Hold These Truths, Heritage’s Matthew Spalding writes that the Founding Fathers recognized the power of free enterprise, and crafted the Constitution to protect it along with American’s property rights. He notes “the striking difference between a free market system based on rewarding the dynamism of the human spirit and a centrally planned system that suppresses capitalism in order to redistribute wealth and limit individual opportunity.”
Unfortunately, our country seems to be sliding away from free enterprise and toward a centrally directed economy under the control of unelected bureaucrats. Many “administrative agencies operate in practice as a headless fourth branch [of government], beyond the control of the executive and limited largely by budgets they carefully negotiate with congressional committees and staff,” Spalding writes.
This could become a matter of life and death, for our economy and for our people. Recall that the Chilean miners rescued in 2010 were saved because of technology developed by small, entrepreneurial American firms. “Companies exist to make money, but there’s no greater satisfaction to the soul than saving somebody’s life,” the vice president for business development at one of those American firms, Schramm, told USA Today. It’s no coincidence that such technology comes from free market countries including the U.S., Japan and Germany, not from nationalized economies.
Free market capitalism sometimes gets a bad name. But we need to start defending it. Otherwise, where are the life- and job-saving technology breakthroughs of tomorrow going to come from?