In an 1859 address to the Wisconsin State Agricultural Society, Abraham Lincoln outlined an argument about economics that continues to this day. In the United States, the right of private property is strictly guarded by the Constitution. (That this is often ignored or rejected today is another matter.) The right to earn and acquire property is essential to the stability of the family, as well as the independence necessary for self-government. Yet there is disagreement about what kind of system emerges when private property is protected. Lincoln explained:
By some it is assumed that labor is available only in connection with capital — that nobody labors, unless somebody else, owning capital, somehow, by the use of that capital, induces him to do it.... They further assume that whoever is once a hired laborer, is fatally fixed in that condition for life; and thence again that his condition is as bad as, or worse than that of a slave. This is the "mud-sill" theory.
But another class of reasoners hold the opinion that there is no such relation between capital and labor, as assumed; and that there is no such thing as a freeman being fatally fixed for life.... They hold that labor is prior to, and independent of, capital; that, in fact, capital is the fruit of labor, and could never have existed if labor had not first existed — that labor can exist without capital, but that capital could never have existed without labor. Hence they hold that labor is the superior — greatly the superior — of capital.
This is the principle of what we today call free market capitalism. It provides the greatest opportunity possible for every person to make his way in the world, and even to prosper. Lincoln phrased it in this memorable way:
The prudent, penniless beginner in the world, labors for wages awhile, saves a surplus with which to buy tools or land for himself; then labors on his own account another while, and at length hires another new beginner to help him. This, say its advocates, is free labor — the just and generous, and prosperous system, which opens the way for all — gives hope to all, and energy, and progress, and improvement of condition to all.
We find Lincoln's statement of the case persuasive. Yet it seems to be the way of the world that eternal verities must ever be explained and defended anew. In our day, no one has done more to prove the verities and virtues of the free market (and the misery of "planned economies") than Milton Friedman.
Economics has been called the "dismal science," but in Professor Friedman's hands it becomes something sparkling — he is, among other things, a captivating speaker. So it is with great pleasure that the Claremont Institute will be honoring Dr. Friedman at our annual Churchill Dinner on November 23 at the Millennium Biltmore Hotel in Los Angeles.
- The 2002 Churchill Dinner, from November 23rd, 2002
- The Millennium Biltmore Hotel Homepage
- The Milton and Rose Friedman Foundation