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Adam Smith and Milton Friedman Vs. Marxists Who Limit Competition and Kill Economies

AP Photo/Jay Reeves

Marxists, among whom we can classify most leftist politicians and business moguls in America today, believe in limiting competition and exercising authoritarian, top-down control over the economy. The claim is always that "the people" will benefit, but in fact, ordinary citizens and especially ordinary workers lose out in such a system. The free market benefits more people than any other system, but that's precisely why Marxist elites hate it.

Remember, Marxists don't want prosperity for as many citizens as possible. They want prosperity for themselves and comparative poverty or severely limited job options for most citizens. A man who can easily start his own business or join a new profession without years of licensing is much less dependent on government dictates and monopolistic ideological campaigns. But a man who needs layers of bureaucratic approval for every career or business decision he makes is dependent on the opinion of elites. 

Adam Smith, the great 18th-century Scottish economist, was one thinker who gave us the key to the sort of crisis we see in America now. “In general, if any branch of trade, or any division of labour, be advantageous to the public, the freer and more general the competition, it will always be the more so,” he observed. Marxists, at least those at the top, understand this; they simply reject it because it doesn’t give them the kind of control they want.

Leftists are screeching about Elon Musk becoming a trillionaire, not because they oppose the uber-wealthy — the woke COVID-19 lockdowns hurt the middle class but helped billionaires — but because Elon Musk enriched many of his workers along the way. Although even Elon Musk built his business empire partly by shipping his industries to China for cheap labor.

Milton Friedman, in Capitalism and Freedom, also warned about the dangers of a society where there is too great an emphasis on corporate or government licenses for jobs. Some jobs are too dangerous not to require some sort of test of competency, such as medicine, but even in that case, the federal government should not really be involved. And it is simply preposterous to say that journalism has improved because all journalists now have to have college degrees, or that barbers or repairmen are much better now than they were 100 years ago because they need more certificates and schools. 

As a matter of fact, in all of the industries I mentioned above, competency, quality, and honesty have decreased within the last century. Licensure excluded a great many people from the workforce in these industries, and it gave government more control and consumers fewer options, but it did not provide marked benefits. Friedman's critique of occupational licenses came from his long-term analysis that they drove up prices, limited access to consumers, and discouraged innovation.

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The danger of requiring licensure for so many professions is not only that fewer Americans can afford to join those professions or be innovative in a way that the powers-that-be dislike, but also that American workers end up getting cut out. I personally know numerous well-off couples who choose to employ illegal alien landscapers and handymen because they're cheaper. Friends of mine have spent years trying to get a job — any job — without results, only to find illegal aliens working those same jobs. 

In other words, requiring oppressive occupational licensure and unnecessary college degrees helped price U.S. workers out of the market while giving un-licensed aliens an opportunity to step in. That's why Texas recently ended professional licensure for illegal aliens. Texas Republicans are trying to counteract decades of anti-American job policies. Democrats, of course, were furious. They want the ultimate control over American workers that comes from their oppressive policies while saving themselves money with loopholes for foreign workers.

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