Free-Market Fundamentals: Business and the War of Ideas

(Lawrence W. Reed is president emeritus of the Mackinac Center for Public Policy and president of the Foundation for Economic Education in Irvington, N.Y., and Atlanta, Ga.)

Years ago as a college professor of economics, I posed a question to each crop of freshman students on the first day of class. “Can anyone tell me,” I asked, “what determines whether society is organized along socialist, centrally planned lines or as a free enterprise, private-property order?” The answer to that query, I suggested, would be the same as the answer to this corollary question: “What causes societies occasionally to change from one economic system to the other?”

Rarely would I elicit the response I was looking for, in spite of all the hints I gave. The students’ answers included: “the President,” “the Congress,” “the news media,” “the unions,” and “the schools.” Invariably, someone would suggest there was no determinant at all, that we were talking about mere random events.

At some point, the guesswork would come to an end and I would reveal the answer I was seeking. “People or the institutions they establish play important roles, but neither one is fundamental enough, because neither one explains why people behave the way they do. The correct answer is that which the French author Victor Hugo once said was more powerful than all the armies of the world: IDEAS!

People like politicians, activists, clerics and teachers can often be agents of change, but ideas are the instigators. In shaping public policy, which includes the larger questions of free-enterprise or socialism, democracy or dictatorship, ideas are of decisive importance.

I recall a revealing study years ago of network television in America: Only 3 percent of business-people depicted on television, the Media Institute found, were involved in “socially useful or economically productive” behavior.

Around the same time, a special PBS program declared, “By the age of 18, the average TV viewer has seen businessmen and businesswomen attempt more than 10,000 murders.” In the decades since these two reports, mainstream television hasn’t become much friendlier to men and women of enterprise. And be assured that when a few business-people misbehave, their faults will be presented as commonplace in the business world.

These unfair but popular portrayals play into the hands of demagogues and political shysters, of which there is an endless supply. Failure to commit time and resources to help shape the climate of opinion around you is shortsighted and probably suicidal.

Some may be quick to say, “But I am involved in such things. I give money to candidates.” That’s important, but it’s also like locking the barn door after the horse has already left. Politicians usually reflect opinion and seldom generate it; what they can accomplish in office is defined and circumscribed by prevailing majority opinion.

If you really want to make a difference, then you should invest in ideas. Change public opinion and the politicians will fall into line accordingly.