Today’s Wall Street Journal has this provocative article by Hillsdale history professor Burt Folsom. Inspired by the fact that Mexican Carlos Slim is now the world’s wealthiest man, Folsom’s piece notes that his wealth comes from monopolies protected by the very statist government and argues that Mexico would benefit from having businessmen like John D. Rockefeller, Henry Ford, whose riches came from selling good in competitive markets. Ford and Rockefeller were and still are denounced as “robber barons,” but they never robbed anyone and through innovation steadily reduced the price of their products.
When I spoke at the Governor’s School back in June, one student objected to my advocacy of a minimal state by saying, “Wouldn’t that take us back to the days of the robber barons?” That’s one of the arguments socialists make against the free market — that without strong government control, we’d be beset by monopolies that would drive prices up and strangle competition. The truth, however, is that monopolies are only harmful if backed up by the power of the state. Without that, business people who aspire to success can only get it by producing and selling what consumers want at prices they can afford.
