Stossel speaks on the efficiency of free markets

The free market is the only meaningful alternative to government programs, which create inefficiency and have unintended harmful effects, John Stossel ’69,Fox Business channel host and libertarian pundit said at a lecture about his political philosophy on Monday.

“It doesn’t help people," Stossel said. "It just slows them down."

The economy works best when there is a free market and people continue to self-regulate, he said, adding that it is important to be skeptical of claims that the government knows who all of the the experts are and the best solutions.

“Government’s someone who jumps in front of a parade and says, ‘I led the parade,’ ” he said.

In the war on poverty since the early 20th century, the government has perpetuated poverty with anti-poverty programs, Stossel said. He showed a graph depicting the gradual rise in government spending since the 20th century, calling it unsustainable and harmful for America’s future.

He offered Social Security as an example of such unsustainable spending. When Social Security legislation was passed, most people were not living until they were 65, so the system can’t be paid for now that lifespans have increased, he said, adding that people receive two or three times the amount they paid into Social Security.

Although many argue that poverty decreased with the government’s sudden involvement with a variety of social programs in the seventies, poverty levels in fact were going down even before the interventions,Stossel said.

He asked the audience why the United States is so prosperous compared to other countries in the world and offered two answers: rule of law and economic freedom. Government is important in establishing rule of law and maintaining peace, but suggested that its involvement in the market should be minimized.

In countries like New Zealand, Australia and Hong Kong, starting businesses and engaging in the market is significantly easier, Stossel said, adding the only reason a number of countries don’t fully pursue a free market is politics.

“We perpetuate poverty with these unintended programs," he said. "Programs cause side effects that weren’t intended and stifle progress."

During the question and answer session, Stossel was asked what he considers to be the source of income inequality. He said he believes the source lies in individual freedom, and that because of world trade and globalization, inequality is amplified.

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It is important for people to acknowledge the inequality, as well as the existence of any envy so long as the market is free, he added.

In response to a question about his stance on healthcare, Stossel said the enormous costs that government bears because of healthcare can only exist because there is not a market. Except for the rare times in cosmetic surgery when consumers pay for themselves, he said, the system as a whole is inefficient.

The lecture, titled “Capitalism and its Enemies,” was sponsored by the Princeton Libertarians and the American Whig-Cliosophic Society and took place in McCosh 50 at 5 p.m. on Monday.