(Note: On Tuesday, July 31, Students for a Free Economy (www.michigansfe.org), a project of the Mackinac Center for Public Policy, partnered with the Milton and Rose D. Friedman Foundation to celebrate what would have been Dr. Friedman’s 95th birthday by renting a box at a Lansing Lugnuts minor league baseball game. Each of the 20 college students attending received a free copy of Milton and Rose’s famous book "Free to Choose" and watched a short DVD on Milton’s life and work. For many of the students, this was their first encounter with the Nobel Prize winner’s ideas.)
What do baseball and free markets have in common? Competition.
You’re watching a baseball game in the bottom of the ninth inning and the score is tied 3-3. The game gets called. No rain, no thunder or lightning, nothing out of the ordinary to stop play. Instead, the game is stopped because the league has determined that 3-3 is the fairest score for everybody. In fact, the league has determined that allowing anyone to score more or less than three runs would be an "unfair balance of score," and that umpires, managers and players need to achieve this tie every game.
League officials decided how many balls, strikes, hits, home runs and every other stat each player and team was allowed per season for the next five years. Anytime an above average player reached his quota of home runs, RBIs or great defensive plays, he’d have to either sit on the bench for the rest of the season or purposely play poorly.
Some teams and players got four strikes instead of three and some players had to hit the ball completely out of the park for a home run, while others just had to get it past the infield.
It wouldn’t take long to realize that baseball under such circumstances would not be fun to watch and that there would be little incentive for players to achieve great things.
Baseball is exciting because no two players are alike in ability or desire, and though everyone plays on the same field by the same rules, the results are anything but uniform. Within the basic set of rules any team or player is free to work as hard as they can to achieve the most they can and enjoy the rewards of their effort. It’s this competition that makes baseball great.
The economy is in many ways like baseball. The same lackluster performance you could expect from a player who is limited in how many runs he can score can be expected from an individual who is constrained by how many workers he can hire, how much of his product he can sell or how much profit he can earn. Removing competition from the marketplace reduces its progress, development and strength.
If government enforces different rules on different businesses and individuals — saying only certain companies are allowed to sell certain goods or taxing products from one country at a higher rate than others — it becomes like moving foul poles or changing home run rules in baseball. The uncertainty of rewards for effort reduces the desire to strive and achieve.
As in baseball, no one can predict exactly what will happen in the marketplace, or what great new achievements will come about. No group of central planners could ever successfully plan all that should happen a year, or five years, in advance. A basic and understandable set of rules need only be laid out and enforced fairly for all, and the creativity and effort of individuals will let them achieve great things.
There is, however, one major difference between baseball and the free market: In baseball, there is only one winner. The free market is completely different. If left free from government intervention, markets are not a zero sum game. Despite what the movie "Wall Street" says, when someone wins in a free market, nobody has to lose.
I recently bought tickets to a baseball game. I did not feel ripped off; in fact I said "thank you" to the person I bought them from. The team didn’t feel cheated, and they thanked me. Both of us gained in the transaction. In a free market, as individuals freely choose to do business, everyone gains and overall wealth increases.
Milton Friedman dedicated his life to fighting not just for the free market, but for freer markets. Friedman knew that government planners could never improve our economy by changing the rules for some, by limiting free trade and competition or by planning how every detail of the market should function. Friedman knew that in order to achieve their full potential, individuals need to be free to try and fail, or succeed, and to enjoy the fruits of their success.
As the students enjoy the game, they’ll be reminded that the same competition that makes this sport so great is also our best hope for a freer and more prosperous future. Thank you, Dr. Friedman, for helping to advance that freedom.
Isaac M. Morehouse is director of campus leadership for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.