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Book Review: What Reality Teaches Us

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No, They Can’t: Why Government Fails — But Individuals Succeed by John Stossel (New York: Threshold Editions, 2012), 324 pages.

John Stossel is the well-known host of Stossel on Fox Business. A graduate of Princeton, he has won an incredible 19 Emmy awards, is a five-time honoree for excellence in consumer reporting, and is a New York Times bestselling author. He was formerly the cohost of ABC’s 20/20 until he “jumped” to Fox before his “liberal” producers at ABC had a chance to fire him.

Yet, as Stossel writes in his latest book, No, They Can’t: Why Government Fails — But Individuals Succeed, “many at Fox disagree” with some of his ideas as well. He even acknowledges that some of his beliefs “are abhorrent to many Fox viewers.” That is because Stossel is neither a modern liberal nor a conservative; he is a libertarian. As a libertarian, he views the proper scope of government as “small and limited,” values “individual liberty,” and favors “the free market over government coercion.” However, he wasn’t always so politically inclined, as he explains in his introduction: “Only twenty years into my career, after I discovered Reason magazine, did libertarian ideas begin to inform my reporting.” The fact that Stossel has been on “the other side” is one of the strengths of the book.

“I’m a skeptic. I’m suspicious of superstitions,” begins Stossel in the introduction. And what does he consider to be the “worst superstition — the most socially destructive of all?” It is “the intuitively appealing belief that when there is a problem, government action is the best way to solve it.” But even though “what government usually does is make the problem worse and leave us deeper in debt,” most Americans still think the government should do something, control something, regulate something, ban something, license something, or fix something. And that is why most Americans need the message of this book. It doesn’t matter which party is in charge of the government, since “both parties share the fatal conceit of believing that their grandiose plan will solve America’s problems” when “neither plan will.”

No, They Can’t contains an introduction, 13 chapters, and a conclusion which consistently and persuasively make the case that, as the book’s subtitle reads, government fails but individuals succeed. The highlight of the book is the 118 contrasting statements, appearing four times in the introduction and from five to thirteen times in each chapter, that first state “What intuition tempts us to believe” followed by “What reality taught me.” Here are a few examples:

“Disabled people need government protection.” “Such protection hurts the disabled.”

“Government must do more for the elderly.” “It is time for government to do less for the elderly.”

“Licensing protects consumers.” “Licensing ends up protecting politically connected businesses from fair competition.”

The couplets also serve as a quick summary of each chapter. They can be read not only before or after the chapter in which they appear, but after the specific details in each chapter are forgotten. The book is further enhanced by just the right number of graphs, charts, and gray text boxes with supplemental information in list form.

One way to judge Stossel’s commitment to libertarianism, that is, a free society, is to look at the people he favorably quotes or refers to: F.A. Hayek, Milton Friedman, Thomas Sowell, Charles Murray, Thomas DiLorenzo, Robert Higgs, Frédéric Bastiat, Amity Shlaes, Tom Palmer, Don Boudreaux, Alex Tabarrok, Ron Paul, Rand Paul, Jeffrey Miron, Ludwig von Mises, Ran-dolph Bourne, and H.L. Mencken.

Oh, Stossel does mention George W. Bush, Barack Obama, Franklin D. Roosevelt, John McCain, Ralph Nader, Michael Moore, Bill O’Reilly, Paul Krugman, John Maynard Keynes, and Newt Gingrich, but not in a good way.

Government intervention

The topics covered in No, They Can’t are the economy, the free market, regulation and licensing, the workplace, health care, food nannies and scaremongers, safety and risk, freedom of speech and expression, education, the drug war, war and the military, the environment, and the federal budget.

Instead of looking to government to fix the economy, Stossel faults the government for screwing up the economy in the first place. The housing bubble was created by subsidies and regulations. Franklin Roosevelt’s programs probably lengthened the Great Depression. Businesses that make bad decisions should fail. The more government intervenes in an economy, the worse people live. If government wants job creation, it would simplify regulations and cut taxes across the board.

Unlike conservatives who talk about believing in a free market that doesn’t exist, Stossel recognizes that “America doesn’t have a genuinely free market” but should. He sees everyone as losing “when government prevents trades or forces us to make exchanges we would not make voluntarily.” But what about income inequality? Doesn’t that mean that laissez faire is unfair? Stossel remarks that “while a free market doesn’t produce equal outcomes, it produces better outcomes.” He views “mutual voluntary exchange for mutual benefit” as making the community richer. But doesn’t the free-rider problem necessitate government intervention into the market? Stossel believes that “free people work things out on their own” and “generate fairer rules when the state leaves us alone.”

Stossel doesn’t disappoint in his chapter on regulation and licensing. He sees “market discipline” as the best way to provide protection from reckless businessmen. It is food producers’ concern about their brand’s reputation that keeps E. coli to a minimum, not government regulations.

Licensing is “anticompetive” and “always an expensive restraint of trade.” He views “competition and reputation” as “better protection against shoddy work than government licenses.” Stossel doesn’t just say these things; he gives example after example to back up what he says. He also makes the point that “established businesses have always tried to use government to handcuff competition.”

Stossel makes the case for free labor markets based on the rights of contract and free association. That does not mean he is opposed to unions or collective bargaining. But he is opposed to labor laws that “grant unions an effective monopoly on certain jobs” and “force workers” to join unions. Although he acknowledges that “unions once helped advance working conditions,” he says that now “union work rules hurt workers because they stifle growth by making companies less flexible.” Stossel explodes numerous myths about unions. He even boldly says that “factories are safer because of the prosperity created by markets, not because of unions.” In his chapter on the workplace, he also explains how the Americans with Disabilities Act, protectionism, and minimum-wage laws hurt workers.

Not only is Stossel not a fan of Obamacare, he is also opposed in principle to government-run health care of any kind. He turns conventional wisdom on its head when he says that “one of America’s biggest health-care problems is not that 48 million people lack insurance — it’s that 250 million Americans have too much of it.” But how can that be? Because “by insuring so much of our health care, we ensure that we are blind to its cost.” Stossel asks (and answers) simple but profound questions such as, Why do employers provide your health insurance but not your food and clothing? And not only does he assail Medicare as an unsustainable Ponzi scheme, he says “it is high time the American government did less for the elderly.”

In his chapter on food nannies and scaremongers, Stossel defends food freedom. Even though he personally thinks that “food faddists who buy raw food and unpasteurized milk are silly,” he believes everyone “should have the right to make foolish choices.” Governments have no business banning trans fat, regulating salt content, imposing special taxes on junk foods, preventing fast-food restaurants from opening, forcing people to make “healthy” choices, or waging war on obesity.

It goes without saying that Stossel believes that adults should make their own choices about safety and risk. There should be no subsidized flood insurance, laws against gambling, gun control, zero-tolerance policies, FDA-prohibited drugs, or seatbelt laws.

Stossel prefers that public schools be called government-run schools because it makes their true nature clearer: “Government schools are inefficient, centralized bureaucracies just like everything else government does.” His horror stories about bad teachers and the unions that defend them are shocking.

Stossel really shines in his chapter on the Drug War. He doesn’t just oppose the federal Drug War because of the Constitution and federalism. And he doesn’t just support legalizing marijuana for medical use. He approaches the subject from the standpoint that adults have the freedom to do what they want with their own bodies. Therefore, “every drug should be legal, and it should be up to adults to decide whether to consume them, medically or recreationally.” And while acknowledging the harm that drugs can do, Stossel shows that the War on Drugs causes the greater harm by militarizing the police, disregarding civil liberties, jailing millions of nonviolent people, causing crime, destroying black families, corrupting cops and politicians, and giving governments an incentive “to continue the war in order to fund its own bureaucracy.”

Stossel exposes the scam of “green energy” in his chapter on the environment. The only energy policy America needs is the free market. Free trade is better than energy independence. He documents the failures of “green jobs” initiatives. He also extols the benefits of DDT and letting people own and profit from the sale of exotic animals. And rather than thinking we need to save the earth, Stossel says the earth will never notice most of the things done in the name of environmentalism.

Stossel tackles congressional spending and the federal budget in his last chapter. After mentioning the budgets of Paul Ryan, the Republican Study Group, Rand Paul, the Heritage Foundation, and the American Enterprise Institute, he faults them for not cutting enough. Then he presents his own more libertarian budget: eliminate the Small Business Administration, foreign aid; the departments of education, energy, commerce, interior, labor, and housing and urban development; agriculture subsidies; the War on Drugs; the FCC; the National Endowments for the Arts and Humanities; NASA; and Fannie Mae and Freddie Mac. He also calls for cuts in untouchables such as Social Security, Medicare, Medicaid, and the military.

Weaknesses

 

I’m sure I was not as uncomfortable reading Stossel’s chapter on war and the military as he says he was writing it, but I would say that that chapter is a little weaker than the others. It seems as though he is still formulating his libertarian perspective on war and the military. He does acknowledge at the onset that he has “never studied war or covered international conflicts.” He says he “cheered when our military retaliated against Al Qaeda,” but “became skeptical when we stuck around to try nation building,” which he considers to be “the worst form of central planning.” He does say, though, that he was skeptical when Bush went to war in Iraq. Stossel says that “intervention frequently goes wrong,” but then seems to imply that U.S. interventions in Kosovo, Bosnia, Serbia, Grenada, Kuwait, and Korea were a good thing. He opposes war with Iran, but then goes on to say that Bill Kristol, Charles Krauthammer, and the neoconservatives “have been right about a lot” — like the troop surge. After stating he is glad that the U.S. military killed Osama bin Laden and other terrorists, he says he assumes that it is “a gain for peace and security,” but he is “not even sure about that.” Stossel seems hesitant to espouse a full-fledged noninterventionist position. After mentioning that “Ron Paul and many libertarians say we should immediately bring our soldiers home” from everywhere, he remarks, “Libertarians have been right about most everything, and I suspect they are right about this, too.” Overall, though, there is much in this chapter to like: he discusses Pentagon waste, corruption, and inefficiency; complex and bureaucratic military rules; the failures of the government on 9/11; and the security theater of the TSA. He explains that war increases government power, that libertarians aren’t isolationists, that the U.S. military actions create terrorists, and that defense spending should be slashed.

My quibbles with the book are more stylistic than substantive. Curiously, there are nice transitions between the book’s first five chapters, but then they suddenly stop when going from chapters five to six. There is no index. Instead of the book title at the top of left-hand pages and chapter titles on the right, as is traditional, Stossel’s name appears on left-hand pages and the book title appears on the right. That makes it difficult to quickly return to a particular chapter — something that readers will want to do after reading the book. Most annoying about the book is the lack of footnotes or endnotes. There are notes at the end of the book, but nothing in the text to indicate that. Instead, when you turn to the notes and look up a page number, you are presented with partial quotes from the text followed by a source. Then you have to turn back to the page the note refers to and find the statement quoted in the notes. For those (like me) who like to read all of a book’s footnotes, it is very frustrating.

Stossel concludes that he is a libertarian in part because he sees the false choice offered by both the political left and right: “government control of the economy — or government control of our personal lives.” And I conclude that No, They Can’t: Why Government Fails — But Individuals Succeed is an eminently readable and extremely important book that shows chapter after chapter and page after page that government is never the solution to any problem. I highly recommend it.

This article was originally published in the May 2013 edition of Future of Freedom.

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