"Economic Freedom is an essential requisite for political freedom. By enabling people to cooperate... without coercion or central direction. It reduces the area over which political power is exercised. In addition, by dispersing power, the free market provides an offset to whatever concentration of political power may arise. The combination of economic and political power in the same hands is a sure recipe for tyranny."

Economists Milton and Rose Friedman Free to Choose

REDISCOVERING FREE ENTERPRISE

By Will Marshall

Imagine
if we can rescue free enterprise
and green our environment
with three small changes.

Every year twenty percent of the world’s economic activity is wasted by producing products that do not create economic value, i.e. they cannot be sold for more than they cost to make. In the U.S., this represents $2.6 trillion. Imagine the positive impact on the environment, people’s lives and Shareowners if we could eliminate this waste by greening free enterprise.

In its 2008 edition on graduate schools, U.S. News and World Report reported that in 2006 new, inexperienced MBAs were paid $105,054 to shift wealth on Wall Street, while PhD. engineers with ten years of experience were paid only $88,433 to innovate products, services and processes on Main Street.

America was a nation of wealth creators, but because of a Defect in the way that we practice free enterprise, we have become a nation of wealth shifters. A culture of wealth shifting can not build prosperity, fairness or a strong economy.

When Adam Smith, the father of modern economics, wrote the definitive treatise on free enterprise in 1776, he titled it The Wealth of Nations, not The Wealth of Individuals. As a moral philosopher, he understood that free enterprise has a higher calling than wealth shifting.

Imagine how our children’s freedom and financial security could improve if we eliminated the Defect in our practice of free enterprise...Imagine if the Defect in our practice of free enterprise is also the reason that we waste twenty percent—$2.6 trillion—of economic output each year.

This book is about the relentless pursuit of freedom, about empowering the human experience and about enhancing our relationship with the natural universe. I hope to complete Rediscovering Free Enterprise by early 2013.

This book is a celebration of economic and political freedom, free enterprise, and the harmony of the responsible individual with both nature and generations past, present and future. It adapts concepts from forester Aldo Leopold’s groundbreaking Sand County Land Ethic into a new Free Enterprise Ethic. It creatively destroys the man-made silos separating environmental and economic green and reunites nature, intergenerational-man and economic and political freedom as part of the same community—the Human Community.

In addition to celebration, this book is about solutions. It is about creating the future.

Rediscovering Free Enterprise contains a pragmatic idea for individual companies and Shareowners that will reinvent global business culture more dramatically than the quality process. By eliminating the Defect in our practice of free enterprise, we will release a cascade of innovative new products and services that will reduce waste, improve Shareowner returns, increase workers’ wages, create high paying jobs, and produce incremental economic growth. This new growth will create additional economic freedom, and—without raising tax rates—enable society, if it so chooses, to pay for unfunded social benefits such as social security and market-based health care ¹-both of which would put American industry on a level playing field with competitors in other countries. In short, eliminating the Defect will increase the wealth of individuals, companies and nations.

Rediscovering Free Enterprise also redefines the practice of economics by introducing a third leg of national economic policy. Based on stimulating innovation, this new third leg will compliment monetary and fiscal policy—both of which are based on stimulating consumption.

Financial market volatility is fertile ground for wealth shifters, but it also makes economic activity riskier and distorts effective operation of the free markets. The result is waste of natural and human resources and the destruction of environmental and economic green. Volatility also reduces innovation by making it riskier. Rediscovering Free Enterprise identifies specific actions that will reduce volatility in financial markets caused by regulations that benefit wealth shifters and discourage investment in innovation which creates new products, new services, higher paying jobs and greater freedom.

Rediscovering Free Enterprise redefines best practices for corporate measurement, corporate compensation and transparent value reporting to Shareowners. In so doing it improves Shareowner returns, management accountability and reduces fraud and legal cheating by wealth shifters.

By defining The Free Enterprise Ethic, Rediscovering Free Enterprise improves our understanding of the role of economics in the human experience and reveals how our generational footprint impacts past, present and future generations as well as the human ecosystem. It also provides a new benchmark against which to judge securities laws, financial market regulations, the performance of financial regulators and the quality of Congressional oversight.

Finally, Rediscovering Free Enterprise revitalizes the American Dream by giving individuals—especially teens a new understanding of personal freedom and reawakens hope by showing teens how they can create their own freedom for less that the price of a latte a day. While enriching their lives with more freedom, these teens will change the consumption paradigm in America by foregoing what they perceive as unnecessary products that reduce their freedom and waste resources belonging to future generations.

Some will say that the scope of these solutions is grandiose. If so, it is because they do not understand the power of innovation, nor do they yet understand the power of small to change the universe—or how the power of small has changed global business culture over the past three decades.