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November 22nd, 2017

Insight

We've Been Blessed By the Free Market. Why Won't We Learn?

Laura Hollis

By Laura Hollis

Published Sept. 14, 2017

We've Been Blessed By the Free Market. Why Won't We Learn?

Though my family escaped Hurricane Irma's wrath here in northern Indiana, we had our own little mess when our septic tank overflowed this weekend, spewing nasty "water" all over the basement bathroom floor.

After several frantic calls to plumbers (who correctly diagnosed it as a septic system problem, and told us who to contact) we reached a local septic company whose owner was out within the hour, and spent 90 minutes emptying and backwashing the tank — on a home football Saturday afternoon, no less.

As I was walking past the company truck in our driveway, I noticed that painted on the front bumper, it read, "Call us for emergencies, 24/7." And I thought to myself again (as I have so many times): We here in the United States are SO BLESSED to be surrounded by the friends, neighbors, colleagues and total strangers who have started businesses. Those businesses are the lifeblood of this nation, and the reason for its prosperity, as well as the quality of life we take for granted.

Business gets a bad rap here in the United States. First, it's often considered synonymous with "big business" even though less than 1 percent of businesses in the United States employ more than 500 people. Rather, nearly 80 percent of all firms in the U.S. employ no one except the owners, and 90 percent of those firms that have any employees have fewer than 20 employees.

In addition, success in business is often falsely attributed to "greed" or "exploitation." Almost two decades spent studying and teaching entrepreneurship has taught me that the heart of every good business is service — meeting a need, or solving a problem. The bigger the need, the better the solution, the greater the success.

Furthermore, an abundance of companies creates incentives to provide better service. One of the reasons someone was willing to come to our home on a Saturday afternoon was because the owner of this company knew that emergency availability would set his business apart. (It did.) This kind of competitive advantage then drives other companies to offer similar services — or additional ones — that benefit consumers.

Not every business is a good one, of course, but most are, and we are all the better for it.

Just think about what you came into contact with today: the food you've eaten, the refrigerator and freezer where it was stored and the other appliances on which it was prepared; the house or apartment you live in and the place where you work (as well as virtually everything in them); the car you drove or bus you rode and the oil and gas that power those vehicles; the clothing you're wearing; the electronics you use; the music you listen to; the bar or restaurant where you meet friends; the countless services you have access to when you need or want them. Millions of people around the country (and the world) have devoted their lives to the businesses that provide these things for us, every day.

Beyond cultivating an "attitude of gratitude," as the saying goes, why does this matter?

Because there is a vital lesson here, and we're missing it. While Republicans in Congress squabble and dither over the best way to deprive President Donald Trump of any visible victories, Democrats — lacking any other message — are now coalescing around the once-fringe concept of single-payer health care. If we get saddled with such a monstrosity, it will be thanks not to Democrats, but to Republicans. They seem to lack any core convictions or leadership skills including, most critically, the ability to communicate to the American public why the free market is to vital to our daily lives, and why we need a freer market in health care and health insurance — not an omnipotent, unmovable leviathan.

This should be an easy sell. Think about it. Food is vital to life. But if there were only one grocery in town, would they have any incentive to make sure their produce was fresh? (Why should they care — where else are you gonna go?) Would you want only one brand of government-provided toothpaste? Why would they care if you want whitening, or sensitivity care, or better taste? Should the government decide what car everyone can drive, or provide it? Can you imagine how much worse airline travel would be if the government maintained the only airline?

This has been tried countless times before, in dozens of countries, and in any number of industries, and the conclusions are clear: Consumers benefit from options provided by the private sector. When choice drops, so does accountability, and thereafter, quality.

I'll have plenty more to say about this in the weeks to come, but for now, Republicans had better get off their rear ends, remind the American public of the benefits of the free market, and get rid of Obamacare before the Democrats exploit GOP inertia to create something even worse.

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Laura Hirschfeld Hollis is on the faculty at the University of Notre Dame, where she teaches courses in business law and entrepreneurship. She has received numerous awards for her teaching, research, community service and contributions to entrepreneurship education.

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