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Classical Liberalism Alive And Well In Miami

Tuesday, October 11, 2016 10:53
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It’s difficult to wage a war without allies, and the War of Ideas is no different. Yet, capitalist defenders—free market intellectuals and wealth-creating business leaders—rarely seem to work together to defend capitalism. Might that be changing?

I came away with that hope from the Mont Pelerin Society’s (MPS) latest global meeting, held last month in Miami. Launched by Nobel Prize-winning economist Frederick Hayek in 1948, the society has long been a bastion for that minority of intellectuals favoring liberty. And far from an insular economists’ club, I noticed a high degree of openness to new ideas and approaches. Highlights included sessions with psychologist Jonathan Haidt and historian Niall Ferguson.

The meeting’s general theme was that capitalism was a “good thing” and merited support. That’s encouraging, but among that distinguished array of lawyers, economists, and think tankers, I noticed surprisingly few business attendees—at first. That intellectual bastion of capitalism seemed to attract very few practicing capitalists. Yet, as I’ve long wondered, how can capitalism be defended without capitalists joining in the fight?

That awareness led me to found the Center for Advancing Capitalism when I stepped down from the presidency of the Competitive Enterprise Institute. The Center’s goal is to craft an alliance of intellectual and business capitalist champions to defend and advance free markets and the prosperity that they make possible. There have long been alliances of this sort favoring more statist policies—the World Business Council on Sustainable Development and the World Economic Forum being but two.

Yet, my initial worry at the lack of business participation dissipated during discussions, as I found others aware of their absence. Moreover, when I raised the alliance idea, a number of attendees were supportive. That encouraged me to search out any businessmen who might be present. I tentatively identified about 25 and sought to contact them.

Most responded positively, and agreed to attend an ad hoc meeting, with equal numbers of free market intellectuals and businessmen, to explore the value and challenges of crafting a global Thinker/Doer alliance. As a global alliance of free market intellectuals, the Mont Pelerin Society provides a recruitment pool for the Thinkers. Perhaps, we considered, it might play a midwife role to launch that broader pro-market alliance? The consensus was that it should, and we should work to make it happen. The group, tentatively titled the Global Enterprise Council, is intended to offset the current global dominance of statist Thinker/Doer groups such as the annual global gabfest at Davos.

There are many challenges to crafting that alliance. Economic liberals are largely isolated in a handful of universities and think tanks. Focus on tenure and writing papers does not encourage business outreach. Business leaders are often cautious about challenging their powerful regulators. And while all firms need to enjoy a positive cooperative arrangements with their customers, employees, suppliers, and investors, they rarely enlist those economic partners as policy allies to help defend their firm against political attack. Business leaders typically focus on achieving sustainable profitability, not on defending the system that enables them to thrive in the first place.

Yet, such an alliance is needed given the fact that economic liberalism in the United States and Europe is in decline. That is ideologically painful for intellectuals; it can be costly to business. Despite business opposition and intellectual arguments for free markets, the extent of government intervention in the economy has steadily expanded over the last century.

Capitalism had a good first century—roughly 1750 to 1850—as the material gains of economic growth were dramatically apparent to almost everyone. But with that success arose a reasonably wealthy middle class—and with it a cohort of intellectuals hostile to the market. That suggests that even nations where capitalism is increasingly popular, such as India, will eventually face a backlash against economic liberalism. Therefore, an alliance to counter global statist policies is absolutely needed.

The Mont Pelerin Society already pulls together classical liberal thinkers from around the world. Might they not invite a comparable group of free market business leaders? Perhaps before the next biennial meeting in 2018, MPS members might reach out to business leaders with an interest in economic liberty to attend the meeting to explore the alliance idea.

The Mont Pelerin Society is well placed to launch this venture. It is global. Its prestige promises to attracting significant business leaders. And it is certainly a prime recruitment base for the intellectual component of the Doer/Thinker alliance. With little encouragement, a number of pro-market business leaders found their way to Miami. With effort, that number could be greatly expanded in time for the next meeting. It’s time to get to work.

Originally posted to Forbes

Tuesday, October 11, 2016
Fred L. Smith, Jr.
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