Minimum wage laws hurt the poor the most. If your productivity is less than the law you will not be hired. Walter Block, Thomas Sowell, Peter Schiff explain.






What should the role of government be in a free market economy?

It is useful to reflect from time to time on the necessary requirements for a robust healthy economy. The series of boom/bust cycles created by the Federal Reserve has been getting larger and more extreme with each repetition of the cycle. The last two busts of the dot-com and housing bubbles have been particularly dramatic. In each case, the malinvestments from the previous cycle are not allowed to be purged from the market, thus preventing the economy from having the solid foundation necessary for a real lasting period of prosperity. Instead the government steps in with fiscal stimulus and the Federal Reserve steps in with monetary stimulus. This rewards the politically connected and powerful at the expense of the rest of us. This is not free market capitalism.

It is doomed to end badly and when it does we need to be prepared to thrust ourselves into the intellectual debate about how to best structure a society and its economy.

So what is a free market economy? Simply put it is one where people voluntarily exchange goods and services without government coercion.

The government currently ties a noose around the neck of the free market in a multitude of ways. It has rules and regulations, favors to special interest groups, currency debasement by inflating the money supply, creation of unsustainable booms and their inevitable busts by manipulating interest rates below their natural rates and so on. All these things disrupt the free market. We have been prosperous because the bounty of capitalism has been able to overcome these shackles. When the next shoe drops and the current system ends we must understand that it was all these things that led to its demise.

All is not doom and gloom however. We need not live through a period as severe as the Great Depression or as persistent as Japan’s current 20 year plus doldrums known as the “Lost Generation.” To enjoy prosperity and a rising standard of living we simply need to remove all the obstacles that our government has put in the way of the free market.

There is no way we can make good on all the debt obligations this country has. They will be defaulted on or paid for with newly created money, thereby debasing and eventually destroying the currency. Politics being what it is, and with the banking crisis of 2008 as a guide it is likely to be resolved by a destruction of the dollar.

When this happens it is crucial to remove the causes of the problem. With a sound commodity backed currency and a hands-off government we can thrive again. Free market capitalism will take care of the rest. Sure losses will be taken and those who took unwise risks will be hurt. Many may be ruined financially, but their bankrupt companies will reopen under new management. The capital goods and factories will be sold to new owners better able to understand market risks.

Former Congressman Ron Paul, the true champion of limited government, understands these ideas more than any other politician. In his own words:

"In a free society, government is restrained – and therefore political power is less important. I believe the proper role for government in America is to provide national defense, a court system for civil disputes, a criminal justice system for acts of force and fraud, and little else."

“I respect the Constitution not because of a nostalgic attachment to an anachronistic document, but because the Founders knew the danger in allowing government to overstep its legitimate functions.”

“A free society can only work when its members agree that there are certain things left to the discretion of individuals — no matter what a temporary majority might think. In practice this means the government must respect private property and the rule of law, or what is also called free-market capitalism.”


Everything the government does should be for the purpose of protecting individual liberty and freedom. The current nanny state mentality of being coddled from cradle to grave will end. When it does free market capitalism is our path back to prosperity. We need to get the government out of the way and allow human ingenuity to work its magic.

The "Evil" Price Gouger.

This is the story of two entrepreneurial young men providing a much desired product, only to be vilified and jailed due to the public's ignorance on the matter. In the end the product is not available for purchase at any price and the would be consumers of the good are at the mercy of an inefficient bureaucracy to eventually supply the good. In the meantime they are helpless to do anything about it.

A large Hurricane swirled several hundred miles offshore in the Gulf of Mexico. Bob and Franks lived in Indiana, a 12 hour drive to any of the Gulf of Mexico states. This is the moment they had been waiting for. Work was hard to come by in their home town in Indiana, but they had an idea on how to earn some. It wasn't a sure bet as a similar venture the previous year didn't pan out and they ended up losing a thousand dollars between the two of them. They decided to take the risk again this year.

They rented the largest truck they could find. They took it to a warehouse store and bought as many case of bottled water as the store had available. The truck was only half full so they went to several other stores and bought them all out as well. All in they were able to purchase over a thousand cases of bottled water. The men went back home and watched the TV to see where the hurricane would make landfall.

The storm was headed for the panhandle of Florida. As the men headed south on the highway Bob remembered the last time he had taken a similar trip. That hurricane suddenly had weakened so they turned the truck around mid way on his trip and cut their losses. Luckily they were able to return most of the water, but he still lost a lot on the truck rental and gas. Despite the financial risks, they still thought it was worth it for him to take a chance again on this hurricane. He calculated he could sell the water for 2 to 3 times what he paid and possibly make a quick $10,000.

When the men were about half way through Alabama they checked into a motel to get some rest and wait out the worst of the storm. Throughout the night the motel was blasted by torrential rain and strong wind gusts. The hurricane had made land fall in Florida with winds of 130 miles per hour. According to news reports, it was still a moderate tropical storm as it passed over them during the night.

Several coastal communities in Florida were badly damaged. In the morning Bob and Frank set off to make their much anticipated profits. To their dismay, a large tree branch had broken the windshield of the truck. Frank cringed and remarked to Bob how much they were going to have to pay have that replaced when he returned to Indiana.

When the men approached the storm ravaged areas they had to slow down and stop often. The damage was visible everywhere. Windows were broken. There was no power so the street lights were all out. Many of them had been blown down. Several times they had to back up and retrace their route when the road became impassable. They didn’t see many people outside so kept driving until they found a strip mall with a supermarket. By now it was early afternoon. The local residents had already cleaned out the store the day prior as news of the impending hurricane developed. The men parked their truck in the parking lot, pulled up the rear sliding door and waited.

It wasn’t long before a middle aged man drove into the parking lot. He was clearly distressed that the grocery store was closed and empty. He saw the truck and made his way over. They sold the man 5 cases at $20 each. Things were beginning to look up for the men. As the day wore on and word spread a crowd gathered. Bob and Frank had sold almost all the water and there were still dozens of people remaining. When it became apparent they men were running out of water the remaining crowd became agitated. They wondered how long it would take him to make another trip out of the storm zone for a fresh load of water. The group of people became louder. Someone called the police. Two squad cars arrived and the police officers approached the crowd. People were screaming, calling the men price gougers. Within a few minutes the police had arrested the two men. They took them to the local jail which hadn’t been too badly damaged.

There was no drinking water in the jail however, so after a long hot night the officers decided to let the men go. They would have to return for their court date and hefty fines the following month. If the men were lucky they would not have to spend any more time in jail. The men climbed into their damaged truck and made their way home. “Never again!!” Bob said as they drove off.

When they arrived back in Indiana, they watched news reports of the affected areas. Apparently the people were still unable to find any supplies. The stores were not yet restocked and no relief agencies had arrived. The reporter showed a line of volunteers bringing food and water to local collection areas in the surrounding states. They hoped to have the first truckload delivered by the end of the week.