I am from Vietnam, where the command economy made people poor like North Korea and Cuba. Afterward, Vietnam imitated China to reform its economy into a capitalist economy. I liked to watch the 1980 documentary Free To Choose by Milton Friedman, where he embraced free market principles. Milton was a Nobel Prize winner. In the Free To Choose documentary, he criticized government intervention in the market, and he embraced Adam Smith’s economic theory, such as markets tend to work best when the government leaves them alone. After a few years, I watched the debate between economic experts who supported and opposed Milton’s ideas. Now, I think Milton’s ideas have problems.
When you look at the US economy right now. Many manufacturers have been closed down because the companies outsourced to countries with cheap labor, where the workers’ wages are a fraction of the US workers’ wages. Why Milton’s ideas have problems. If you let the economy operate by itself, the big companies often merge or buy out competitors. This is not good for the market. That is why the US has an antitrust law to prevent such happening.
Why Milton’s ideas have problems; many companies, because of their profits, they outsourced overseas or to other countries. Many of the US workers lost their jobs, and social problems appeared. The market crash in 1929, because the government believed the market could fix itself. So the Great Depression lasted 10 years until the government intervened in the market. That is why John Maynard Keynes pointed out the flaws in Adam Smith’s theory. When the market crashed or was in recession, people believed that the market could resolve itself. In reality, it is not. It often stays in the idle mode until the government intervenes. That is why in recent decades, the government has often intervened when the market crashes or recession. In recent decades, we haven’t had a recession last more than a few years. Marx warned that capitalism has seeds of its destruction.
That is why, right now, the US government uses tariffs to bring manufacturers back to the US. It is necessary. Why? When the manufacturers in the US, the US workers, and the owners are under pressure from competitors. They often come up with innovations or automation to reduce costs. That is why China, in recent decades, has had more innovations and automation than the US in manufacturing. The more you do, the more you improve.
That is why I like to watch, listen and read from people with different ideas. Sometimes, you believe your ideas without considering others’ ideas, and you may be wrong.