From the Archives: Steve Forbes makes the moral case for free markets and free people

Publisher's note: This article was originally published on Examiner.com on January 9, 2013. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016. I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Steve Forbes makes the moral case for free markets and free people

Speaking at the Heritage Foundation on Wednesday, January 9, two-time presidential candidate Steve Forbes made the ethical case for free enterprise in summarizing his most recent book, Freedom Manifesto (coauthored by Elizabeth Ames), which has as its subtitle “Why Free Markets Are Moral and Big Government Isn’t.”

Forbes, chairman and editor in chief of Forbes Media, began by invoking Alexis de Tocqueville’s warning about “soft tyranny” – when, Forbes said, “government takes more and more responsibility away from you and makes you more passive and dependent.”

When people like himself express fears about “big government,” he said, they are not talking about the kind of government James Madison wrote about in the Federalist. They are not expressing a desire for what the “other side” tries to portray as a desire for “anarchy.” Rather, Forbes said, they are trying to make a cogent case for keeping government limited to a few things that it can do well and properly, leaving to the private sector and to individuals the overwhelming rest of things.

'Deeper sense of humanity'

Forbes defended free markets as being “moral because they meet the needs of other people.” Free markets, he said, promote both opportunity and a “deeper sense of humanity” by stimulating creativity and innovation, in the arts and philanthropy as well as in commerce and industry.

Steve Forbes at Heritage Foundation

Commerce, he said, “is a profoundly creative exercise” that produces “extraordinary circles of cooperation around the world.” He cited Leonard Read’s widely-distributed essay of the 1950s, “I, Pencil,” which explains how thousands of individuals divided by thousands of miles contribute to the making of a single pencil.

Markets, Forbes explained, “are about transactions” – not, as Hollywood stereotypes might portray it, as about “taking” but about “trade.” Commerce, he continued, “breaks down barriers between people. It channels their energies toward constructive ends.”

Because commerce is about people interacting with each other, he scoffed at the notion that economics is “the dismal science.” It isn’t dismal, Forbes said, because “it’s about people, and people are always fascinating.” Contrary to old definitions of economics as being about studying scarce resources, he said, it’s quite the opposite: “It’s about creating resources” and making useful things out of things that were not useful.

Luxuries no more

He gave examples of how products once reserved to the very rich are now commonplace. A century ago, he said, “the automobile was a plaything for the very rich” and it cost about $150,000 in today’s dollars. When Henry Ford and his engineers created the mobile assembly line, that changed, and the automobile became a product nearly anyone could afford.

Similarly, he said, 30 years ago, a cell phone cost about $3,000 and “it was the size of a shoebox.” With innovation and new technology, the cell phone became ubiquitous – even in poor, Third-World countries.

Looking further back, Forbes noted that “200 years ago, famines were common in Europe. People then didn’t even make $1,000 a year in today’s dollars.” Agricultural technology and the division of labor has, since then, eliminated famine in Europe and the rest of the industrialized world, even as the number of farmers has declined to a tiny fraction of the population.

Although free markets have an undeserved reputation of being unstable, Forbes said, they instead allow for the improvements that are built upon failure. Steve Jobs, he pointed out, was fired by the very company he created, only to come back and make it even bigger and better. He quoted Bill Gates as saying that “success is a poor teacher.” Free markets allow failure to teach and serendipity to guide innovation.

Money as 'liberator'

Citing Alexander Hamilton’s view that “money is a liberator” because creating things in a commercial environment is blind to race, class, and ethnic differences, he pointed out as well that “money is just a facilitator” for people making transactions with “each other in a common endeavor” – even people who never meet each other and may not even know about the others’ existence.

Forbes concluded his remarks by reiterating that “free markets are about people creating” – creating products and services that meet the needs and wants of other people. Free markets, he said, look to the future while governments look to the past.

Forbes Likes Charlottesville

Forbes magazine has published a survey of what it calls the "top 20 college towns for jobs" and metropolitan Charlottesville, home of the University of Virginia and nearby Piedmont Virginia Community College, made the list.

Provo, Utah, where Brigham Young University is located, ranked first, while Charlottesville and UVA came in eleventh.

Forbes' correspondent, Matt Woolsey, writes:

We defined "college towns" as U.S. metropolitan statistical area and metropolitan divisions--geographic entities defined by the U.S. Office of Management and Budget used by federal agencies in collecting, tabulating and publishing federal statistics--where employment from universities, four-year colleges, two-year community colleges and university medical teaching hospitals supplied 2% or more of area jobs. Jobs created at for-profit universities and strictly Internet-based universities were not counted. Using Data from Moody’s Economy.com., we looked at year-over-year job growth in each college town. While jobs in the U.S. as a whole shrunk by 3.5% from March 2008 to March 2009, there were 62 college towns that experienced job growth.

Our list includes plenty of idyllic college communities, such as Charlottesville, Va., home to the University of Virginia and its grand Jeffersonian architecture, where 12.7% of metropolitan residents are employed by the university, and jobs are up 2.47%; as well as Athens, Ga., where you’ll find the University of Georgia and more than enough bars and music venues to entertain its 35,000 students. Employment in Athens is also up 2.47% for a year ago. Also on the list, however, were bigger metros like Seattle (2.19%) and Oklahoma City (1.51%), where clusters of large universities have continued to create jobs through the downturn.

One surprise on the list: Jonesboro, Arkansas, ranked number 19. One surprise because it's not on the list: Madison, Wisconsin.

Here is the profile of Charlottesville from Forbes:

No. 11. College Town: Charlottesville, Va.
(Metro area: Charlottesville, Va.)
Primary university: University of Virginia
Percentage of workers in university jobs: 12.7%
Job growth since 2008: 2.05%

Data from Moody’s Economy.com.

Let me be just a bit critical of Forbes.com. In order to see all the towns on the list, a reader must go through 20 pages of a slide show, and each page takes an excruciatingly long time to load. I realize that Forbes wants to have more page views and more eyes to offer its advertisers, but this format is really user-unfriendly. It makes me reluctant to return to see similar stories in the future, and that makes it advertiser-unfriendly, too.

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Steve Forbes for Treasury Secretary

Regardless of who wins the presidential election on November 4 -- whether Bob Barr, John McCain, or Barack Obama -- when the new president takes office in January 2009, he could do much worse than to name magazine publisher Steve Forbes as his Secretary of the Treasury.

While the political world is full of Chicken Littles warning that our economy -- which is in a period of growth about equal to the average since World War II, and which sees unemployment at a level lower than the average since World War II -- is ready to collapse, Forbes offers a voice of sanity. His optimistic message about the economy has hardly changed at all since his presidential run in 1996, and for good reason: the U.S. economy has been, and continues to be, in good shape -- especially when compared to our trading partners in Europe and elsewhere around the world.

According to an article published in Thursday's Washington Times:

Publishing tycoon and former Republican presidential candidate Steve Forbes on Wednesday urged people to put the crisis on Wall Street in perspective, saying it "will quickly pass" so long as the Bush administration and financial regulators strengthen the dollar and enforce rules on the short-selling of securities.

"Put things in perspective: We will get over it," Mr. Forbes said in a speech hosted by the Ad Club of Metropolitan Washington on Wednesday morning. "But if we continue doing dumb things like make monetary mistakes, raise taxes, do crazy things on the regulatory side, you can get a real disaster on your hands."

Quoting extensively from Forbes' speech at the Ad Club, correspondent Kara Rowland reports:

"Long story short, in 2004 the Federal Reserve, then headed by Alan Greenspan, made a fatal miscalculation," he said. "They underestimated the U.S. economy. They printed a lot of money because they thought the economy needed it, and the engine flooded."

As a result, Mr. Forbes said, commodity prices shot up and the domestic economy became distorted. Housing prices were already going up, and the influx of money led people to build and buy more houses, lending standards eroded and a subprime-mortgage crisis erupted, he said.

"It just went berserk; a classic bubble, and thanks to high technology, global economy, securitization, it took on proportions it had never done before in history," he said. "So how did the Fed respond? Having gone on one drinking binge, it went on another: It cranked up the money press again."

The Treasury Department should have told regulators to "back off" at that time, but instead praised the move, said Mr. Forbes, who called the country's "weak-dollar policy" the "biggest mistake of the Bush administration."

"If cheapening your money was the way to wealth, then Zimbabwe and Argentina would own the world," he said.

Far from panicking -- which, unfortunately, is the attitude of both major-party presidential candidates, including the normally hands-off McCain as well as the central-planner Obama -- Forbes suggests we should look at the current situation more calmly and intelligently. Writes Rowland:

Moreover, recent losses may seem big, but people should put them in perspective, Mr. Forbes stressed.

"If you look at median net worth in the United States in the last 10 years, it's gone up over 30 percent," he said. "What's happened in recent years is unprecedented in human history; never before in so many parts of the world have so many people advanced economically as happened in recent years. Each year, 50 [million] to 70 million people around the world join the middle class."

The U.S. has weathered economic storms in the past and will make its way through the current crisis, he predicted, if the Fed redefines its mission as "focusing on a stable currency and dealing with panics." It should start to soak up some of the excess money it created and the Treasury Department should announce a strong-dollar policy, he said, adding that financial regulators should try to standardize "these exotic instruments" that have been created by Wall Street.

"Make the dollar stable. It's not that hard to do. Maybe I should write a book, 'Central Banking for Dummies,'" he joked.

In the meantime, Mr. Forbes said, investors should stay calm.

"This is precisely the time [you] don't give into your emotions. Your emotions are your enemy."

I wrote my first article about Steve Forbes for the Metro Herald back in September 1995, shortly after he announced his bid for the Republican presidential nomination. This is what it said:

Does Steve Forbes Have the Right Stuff?
Richard E. Sincere, Jr.

The Republican presidential horse race just got a thoroughbred entry -- a 25-to-1 shot with a $25 million purse. But can millionaire magazine owner Malcolm S. "Steve" Forbes, Jr., break away from the pack to win the race? Pundits are skeptical.

Forbes is the son of the late publisher Malcolm S. Forbes, a former correspondent and now the editor-in-chief of the magazine that bears his father's name. There are reports he plans to spend $25 million of his own money to win the Republican nomination and to go on to defeat President Bill Clinton in November 1996.

Announcing his candidacy formally at the National Press Club in Washington on September 22, Forbes described himself as fundamentally different from the rest of the GOP candidates. He said "their vision of what we can do is narrow, cramped, and constricted." He noted that all of them "have been in Washington, or in politics, or both, all of their adult lives. They haven't been at the center of the entrepreneurial economy. I have, both as a reporter traveling the world and as a businessman, running a company. That," he said, "has been my life."

Indeed, if vision is what elects candidates, Forbes stands head and shoulders above the rest. He has a consistent vision lacking in Bob Dole, for instance, who after 35 years in Washington is known best as a "compromiser" with no overarching political or economic philosophy. Forbes has a focus absent from Bob Dornan, whose public speeches ramble and roam with no coherent direction, except to attack gay and lesbian taxpayers. He has a certainty superior to Phil Gramm, who has lurched to the right in recent weeks to appease religious conservatives, who make him fidget nervously. Forbes has a coherence unseen in the campaign of Pat Buchanan, who calls for freedom except for immigrants, and international trade, and minorities, and political dissenters, and (pick a favorite category here).

Of course, vision alone does not elect candidates. Forbes may have a lot of money, and a clear message, but he doesn't have a lot of political operatives around the country. Like it or not, politics is still largely a game of machine-based politicians. Without the ability to call in his chits, Forbes is unlikely to build the support he needs among local activists who select delegates to the big show -- the Presidential Nominating Convention.

That aside, Forbes' message is compelling. He demands scrapping the current income tax code. "Don't fiddle with it. Junk it. Throw it out. Bury it." In its place, he calls for a "pro-growth, pro-family tax cut that lowers tax rates to 17 percent across the board." This flat tax would have exemptions that ensure that a family of four earning $36,000 or less will pay no taxes.

He really parts company with the Republicans in his firm, unmitigated support for term limits. In an article he wrote for the September 25, 1995, edition of Forbes (the magazine), the new presidential candidate noted correctly: "Public support for term limits remains unwaveringly strong, regardless of race, party, income, or gender. People agree with Thomas Jefferson, who said that the Constitution should have mandated the rotation of elected officeholders."

At his campaign kick-off, Forbes said:

"I want to change the culture of Washington by changing the rules of the game. And to change the rules of the game, you have to do two things: You have to take away the politicians' power to manipulate the tax code. . . . And you have to limit their terms."

In addressing "values," Forbes acknowledged a truth that the so-called Christian Right is unwilling to admit. The real reason for the breakdown of family values, and of families themselves, is the breakdown of the economy caused by the growing intrusiveness of government. By deregulating the economy, by cutting taxes, by offering parents the right to choose any school for their children, by focusing the energies of police and prosecutors in violent crimes, we can restore values to their proper place in our communities. Forbes is on the right track -- though his announcement speech lacks specifics. (That, of course, might be its attraction: By letting the other Republicans fight over the title of "most righteous," Forbes might win "most likely to succeed.")

Some say Steve Forbes is a stand-in for Jack Kemp in the 1996 presidential stakes. Some call him "Kemp Lite." Indeed, his campaign staff is made up of many former Kemp associates. Forbes, however, does not seem to be as squishy on welfare and regulatory issues as Kemp is. Kemp is a big-government Republican. Forbes, if his actions match his words, genuinely believes in shrinking the size and scope of government. We'll see.

Steve Forbes brings new interest and new experience into the Republican presidential race. Can he go the distance?

* * * * * * * * * * * * * * * * * * * * * * * * * *

Richard Sincere is author of The Politics of Sentiment: Churches and Foreign Investment in South Africa, and other works.

Comparing the quotations from my 1995 article and Kara Rowland's piece in yesterday's Washington Times, one can see that Steve Forbes has lost neither his idiosyncratically staccato speaking style nor his overarching vision of free-market economic policies.

Can we start a write-in campaign for "Steve Forbes for Treasury Secretary"?

Memories of the '96 New Hampshire Primary

Twelve years ago, I drove to New Hampshire with some friends to campaign for presidential candidate Steve Forbes in the 1996 Republican primary. The New Hampshire primary in 1996 was much later than this year's -- it took place on February 20 instead of January 8.

Forbes attracted a lot of libertarian support that year. In fact, despite having his name only on the Republican ballot, he placed fourth in the Libertarian Party primary as a write-in candidate, just as he did as an official candidate in the Republican Party primary (behind Pat Buchanan, Bob Dole, and Lamar Alexander).

Many of the volunteers we met in Manchester, Concord, Exeter, and other towns told us, without prompting, that they were libertarian by philosophy but that Steve Forbes was the candidate who resonated the most with them. (That they were not campaigning for Harry Browne or Irwin Schiff in the New Hampshire Libertarian primary that year says a lot about Forbes' appeal.)

Besides campaigning for Forbes, I wrote about the primary campaign for The Metro Herald. If I can find those articles in my files between now and February 20, I may post them here.

For now, here are some of the photos I took in the several days preceding the election and on election day itself -- including the Forbes Victory Party in Manchester on the night the results came in. It truly felt like a victory party, too, despite the fourth-place finish. The crowd was animated, enthusiastic, and ready to go forward to real victories (which eventually took place in Delaware and Arizona, the two state primaries won by Forbes that year). It helped that the emcee of the celebration was Joan Rivers, not only a celebrity in her own right but also a longtime friend of Steve Forbes and his family.

This is one of my favorite photographs from the 1996 New Hampshire primary. It shows Steve Forbes among supporters and TV cameras just after he got off the campaign bus. Several months later, I asked him to sign the picture for me, and it now hangs on my living-room wall.

Whatever happened to MTV's "Choose or Lose" campaign? It was a big deal in 1996, and MTV threw a huge reception in Manchester for young voters and campaign volunteers.

I snapped this picture in the state capital of Concord. I've always been amused by the intersection of "Church" and "State" streets.

Speaking of Concord, it seemed that an orchard of campaign signs had sprouted on the grounds of the State Capitol itself.

Here I am among the blossoms.

Few remember that former California Congressman Bob Dornan (known as "B-1 Bob" for his pro-defense positions) was a candidate for president in 1996. Dornan was the xenophobic candidate that year, sort of like Tom Tancredo but far more colorful. Here he is with my friend, David Brown of Charlottesville, who was campaigning for Steve Forbes in 1996 and this year is in New Hampshire campaigning for Ron Paul. I wonder how many other Forbes supporters from the Class of '96 are activists for Dr. Paul this year?

Although we were working for Forbes, somehow we found ourselves at a Lamar Alexander rally at Phillips Exeter Academy. Here are my friends Tom Jamerson (right) and David Brown on the academy grounds before the rally.

Inside an auditorium at Phillips Exeter, Lamar! -- that's what his campaign signs said -- was introduced by fellow Tennessee Senator Fred Thompson. What has he been doing lately?

Back outside, Tom Jamerson, David Brown, and I showed our support for the other side. Someone -- perhaps a Lamar! supporter -- was kind enough to take a snapshot.

Back at Forbes headquarters in Manchester, staffers and volunteers were watching the candidate in a TV interview.

The candidate himself looks confident leaning out of the campaign bus.

Journalist Deroy Murdock (left), whom we picked up along the way in New York, covered Forbes and other candidates in the days leading up to the election. Here he is with a Forbes staff member.

The election night party burst with color. Here I am ready to celebrate.

We also wanted people to know that Steve Forbes' supporters came from far and wide.

Like Ron Paul today, Steve Forbes had a strong contingent of youthful supporters.

Here is Joan Rivers arriving to host the festivities. That had to be at least three faces ago.

Maybe four faces ago.

Despite what must have been a disappointing finish, candidate Steve Forbes and one of his daughters appear exuberantly happy.

This is just a reminder of why New Hampshire is important in American history, over and above its place as the "first in the nation" primary state. It's no accident that President Jed Bartlet first served as New Hampshire's governor.