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Morality of Markets

Blog by TAB President & CEO, Glenn Hamer. The purpose of the Texas Association of Business (TAB), the Texas State Chamber, is to “champion the best business climate in the world, unleashing the power of free enterprise to enhance lives for generations.”

Chambers look at their work as creating an environment where people can flourish through the free market system. I’d argue that it’s a case of morality.

There are two major economic powers in the world, the United States and China. The free market system dominates in the United States while the government dominates activity in China. Within the United States there are two different approaches to the free market. The Texas approach with low taxes, light regulations and a celebration of job creators of all kinds and sizes. Florida and Arizona have similar models. Then there’s the California approach (shared by states like New York and Illinois) with very high taxes, excessive regulations and relentless shaming of job creators.

From our view the evidence is clear that the more the market can operate without government interference and high taxes the more attractive that place will be to people and businesses.

“The best business climate in the world” is possible when taxes are low; regulations are light on labor and capital; the rule of law is respected; government policy is devoted to encouraging the able-bodied to work, and society is a meritocracy.

The above more or less describes the Texas Miracle. Texas is arguably the healthiest free market economy on the planet today, with a $2 trillion GDP. If Texas were a country it would have the ninth largest economy in the world!

At a population of almost 30 million and climbing, Texas is also the fastest growing large state in the nation. The people who move here and stay here are a big reason why we have one of the most resilient workforces on the planet. We’re experiencing a record high in employment, while most states have still not recovered all of the jobs they lost during the pandemic.

Within the United States, — the most desirable country in the world from an immigration point of view — Texas is the most popular destination for migration within the country. It’s also the stickiest for those born in the state. Translation: over 80 percent of natives choose to keep Texas as their permanent home.

States with a dedication to free markets are winning the race for people and companies. The three states that make all lists of fast-growing states are Texas, Florida and Arizona.

While the three states hemorrhaging jobs and people, California, New York and Illinois have taken the opposite tack — loading taxes, regulations and growing a social welfare state to levels that push those with ambition to move away.

Texas, for example said no thanks to the expanded federal unemployment benefits that clearly served as a disincentive to work. Another free market state, Arizona, is a trailblazer in licensing reform. Occupational requirements often are excessive and are particularly punishing to military spouses, entry-level and lower-skilled workers as well as those with criminal convictions looking to become productive members of society.

Merit is also part of the equation. Bill Clinton famously said, correctly, in my view, if you work hard and play by the rules, you should be able to live a good life in the United States.

Hard work and merit should be rewarded. Not taxed to no end.

“Unleashing the power of free enterprise” is the key to solving the most challenging problems. It was the technological brilliance of Texans that led to the fracking revolution — arguably the most important advance to date in reducing carbon emissions as natural gas overtook coal— and to the invention of semiconductors. More recently the development in the US of a wide array of vaccines and therapeutics to combat Covid-19 is a result of our free market system. Contrast this with China, which is literally locking up its people by the hundreds of millions in part because it’s government-heavy system has led to subpar treatment options.

When you have the best business climate in the world and a thriving free market, the third clause of our purpose statement is fulfilled, “to enhance lives for generations.”

Most people work hard to help provide for their families’ immediate needs and secure their futures. People and companies who do well financially tend to also contribute time and treasure to their communities. Think of the philanthropic power of the “1 percent” in American history who have helped build civic institutions that enrich us all culturally. These individuals as a group contribute great wealth to health, poverty and educational initiatives that are vital for those in need.

Also think of our current top issue of the day: spiraling inflation. And the solution is not more taxes – despite what some in Congress seem to think. It’s immoral to tell hard working Americans and successful businesses that the government will tax you, over-regulate you -- and for good measure --constantly demonizing you while transferring your hard-earned resources to those who can work but do not. It is more moral to create a system that encourages work, which leads to goods and services that people freely consume. Not to mention the dignity and satisfaction of those participating in the labor force contributing to the happiness and well-being of others.

Free markets are moral. The chambers across America are the best network to sing the gospel.

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