Two days ago I ordered online a used copy of Milton & Rose Friedman's classic "Free to Choose," hoping a liberal loved one would be willing to read it. That doesn't look like it's going to happen, so now I'm tempted to send the book to Barney Frank—since it's apparent that, like many liberals, he doesn't understand the most basic notions of how free markets work.
On Steve Kornacki's MSNBC show today, Frank described business creators as being "given privileges." Barney then added this mind-boggler: "there's only a limited amount of space, there's only a limited amount of businesses. Your being there means somebody else wouldn't be."
It's not clear exactly how Barney sees business working, but it seems that he might see businesses as in essence franchises to be awarded by the government. There are only so many available. Of course the truth is just the opposite. In a free society, there is room for any entrepreneur to jump in. The limiting factor is the market itself, which will ruthlessly weed out those enterprises that are not providing goods or services people want at prices they're willing to pay.
Barney's befuddled mindset is presumably shared by many of his fellow liberal legislators, and the MSM that covers them. I'm all for freedom in the selection of college courses, but wouldn't it be nice if all undergrads were given a basic grounding in Econ 101 and the laws of supply and demand?
Note: Frank made his comments in the context of criticizing the Indiana law giving businesses that refuse to serve gay customers an affirmative defense based on religious principles. But the focus here is on the stunning misconception of capitalism that Barney's statement revealed. Leaving aside the issue of whether the Indiana law is good policy, if some businesses limit the customers they're willing to serve, that actually creates an opening for the creation of other businesses that do not so limit themselves. So Barney's point is 180 degrees off the mark.
BARNEY FRANK: When you open a business, you are being given a set of privileges and protections from the society to make some money and in return the obligation has always been been under basic common law that you serve the general public, that anybody who behaves well can be served because frankly there's only a limited amount of space, there's only a limited amount of businesses. Your being there means somebody else wouldn't be there.
