Capitalism without Friedman

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LINDSAY MAST, HOST: It’s Wednesday the 8th of July.

Glad to have you along for today’s edition of The World and Everything in It. Good morning, I’m Lindsay Mast.

NICK EICHER, HOST: And I’m Nick Eicher.

It’s Washington Wednesday. Back with us is Hunter Baker. Hunter is a senior fellow at the Center for Religion, Culture and Democracy. Good morning, sir.

HUNTER BAKER: Good morning.

MAST: Hunter, it feels like more than a week since we talked last, so there’s lots to catch up on. Let’s start with themes from America 250. President Trump used two major speeches over the holiday weekend to say something about what comes next. At Mount Rushmore, he argued there can be no American freedom without American culture. Then, in Washington, he celebrated American power, told the story of a black Union soldier who refused to let the flag touch the ground, and then repeatedly attacked communism. Listen.

TRUMP: Communism is a loser. It always was, and it is right now, it’s a big loser. Look at the people that are promoting it. They are not the people you’re going to follow. In 250 years, the free people of this land have accomplished more with our liberty than any other society.

Hunter, you heard something significant in all of that. What was it?

BAKER: It was very interesting to me that he brought up the topic of communism, obviously. We saw the end of the Cold War, what I sometimes call Project 1989, with the fall of the Berlin Wall, and it seemed like the issue just receded. The Russians, the Soviet state actually ceased to exist, and Communist China, while keeping the name, embarked upon this big move toward free markets, or at least some sort of a nationalistic market economy. And so it just didn’t seem like communism was a threat anymore, and so people stopped talking about it.

And yet in these past few years we have had this sudden resurgence in the United States of socialists, ardent socialists. Trump is conflating a little bit between socialism and communism, although there’s a lot of family resemblance there, and he is just making the point that this has once again become an issue, and he’s trying to rouse the American people to forcefully reject it.

MAST: So, is the president trying to make anti-communism a central organizing principle of American politics again?

BAKER: I think he is. I think that he is trying to speak to all those Americans who have bad memories of our conflict with communist powers and trying to remind them, do we really want to let this rise again? Do we really want to have this colossal global sort of twilight struggle, which was incredibly significant, involved all this nuclear tension? It was an incredible battle. Do we really want to go backwards? Do we really want to backtrack on human freedom by moving in the direction of some kind of central control of the economy?

EICHER: Well, Hunter, issue two: the ownership society. Trump accounts, as we all know, went online this week. Michael and Susan Dell and Ray and Barbara Dalio, big supporters of the program, they were at the White House this week for the event. And what we know about it is that children who were born from the beginning of 2025 through the end of 2028 receive $1,000 in seed money from the federal government. And I can disclose I’ve got a couple of grandsons who qualify for the program.

More than half a million children, other than those two, reportedly have received the money when the program opened up. Parents, employers, charities, philanthropists can contribute even more to this program. And Hunter, when we were talking about this a few days ago, you said you were really excited about it.

BAKER: Yeah, we’ve moved from an old American model, which was you tried to get a job that would have a pension of some kind, and then you would supplement that with Social Security, and hopefully paid off your house and your car, and then you would retire.

And I think that we’ve moved into something where a lot of people have joined what you might call the investor class, where they’re fully invested in their 401(k), and they get the corporate match and all that stuff. And I think those people are very strongly invested in America, in their country.

And I think that what Trump is trying to do is he’s trying to expand that investor class. $1,000 is obviously not a lot of money, but it’s a start, and it draws people’s attention to what would be possible when that money compounds over a lifetime. So I’m very encouraged. I think that this is an important way to get people invested in the growth of the economy, to really be participating instead of just being spectators.

EICHER: Oh, listen, $1,000 for a toddler. I looked back at that little guy and I said, man, you’re rich.

The Wall Street Journal had an interesting criticism of this pretty serious design flaw: parents putting after-tax dollars into that account, and then the money gets taxed again when it matures and it becomes his own, becomes ordinary income. So for most families, you would look at a 529 or just an ordinary brokerage account that may be a better deal. So on balance, is this a better political idea than it is tax policy?

BAKER: I’m almost positive that that’s true. But what I would say is that this gets the public attention and it gets people invested. I’m sure that there’s going to be a time when they’re going to go back and they’re going to reform this and make it work better than it is.

But I think this is a really great start, and as you can see, some very serious money people, Dell and Dalio, and I’m sure there will be others, have already invested massive amounts of money in this. So I’m very hopeful for what’s possible in the future.

EICHER: Hey, speaking of investments in capitalism, Vice President JD Vance recently dismissed the economic philosophy of the great Milton Friedman, the free-market laissez-faire tradition, and that has brought really quite a response from economists like Larry Kudlow, Stephen Moore, and many, many, many others.

Why does it matter, do you think, Hunter, that the likely future standard-bearer of the Republican Party is speaking ill of Milton Friedman, of all people?

BAKER: Because Milton Friedman is at the very core of what the Republican Party has been for decades. We were talking about the Cold War. Milton Friedman, right in the middle of that. I mean, I thank God that we had the intellectual influence of Milton Friedman.

And read his book. He wrote a couple of popular books, Capitalism and Freedom and Free to Choose, and those books are easy to understand, and they are excellent.

And one of the points that he made was that it’s not just that capitalism is better in terms of economic growth and generating wealth, but it’s also better in terms of preserving the conditions of freedom. Friedman would point out that in Moscow, you could only buy the party’s newspapers, Pravda, or something like that, or the Workers Daily, whereas in New York City you could buy Pravda, you could buy the communist papers, and you could buy The Wall Street Journal and The New York Times and everything else as sort of an easy demonstration of the superiority of a free and free-market society.

MAST: Well, Hunter, it appears the Platner time bomb finally detonated. A new story came out this week about sexual assault allegations against Maine Senate candidate Graham Platner. He denies it, says it’s inaccurate, though he immediately said he and his team needed to regroup and figure out what to do next.

So Democrats are rescinding their endorsements. Even Bernie Sanders called on Platner to quit the race. Now, all of this touched off a fight over who replaces him before he’s even formally left. Progressives say Maine voters rejected the establishment. Moderates say the Platner collapse proves the left should show some humility.

So who wins the replacement fight?

BAKER: It is interesting. This is a great demonstration of the battle that’s going on nationally in the Democrat Party. There is a, I would say, more than progressive group, socialist group, communist group, Platner being one of the members of that group, and they are at war with the more normal members of the Democratic Party, who are pretty liberal to begin with.

But they are arguing that the regular Democratic Party is complacent and compromises and hasn’t pushed far enough, and they are worried that if Plattner goes out, that they will have somebody else come in who will be from the moderate wing of the party. And of course Plattner himself looms large in all this because he has a say about it.

EICHER: Well, in the time that remains, we’ve still got a couple things we need to touch on. No small item: the NATO summit.

Hunter, President Trump is in Turkey for the summit meeting. He’s renewed his complaint that America’s allies are simply not carrying enough of the security burden. So let me just ask you for a prediction on this. Do you think Trump leaves Turkey with a stronger alliance or a bigger rupture in the transatlantic alliance?

BAKER: I think we’re in a time of really serious change. The United States military used to maintain the standard that it was always going to be ready for a major two-front war. In recent years, we have walked back from that standard. I’ve heard ready for 1.5 fronts, or even just one front.

And I think that increasingly the American attention is directed toward Asia and the Pacific, and so he has been fighting to get the other members of NATO to take up more of the slack. The problem is that he’s leaning a lot on power and threats and withdrawing forces and resources that we have previously committed to the defense of that continent.

And the question is, are they going to bridle at what they perceive as a lack of respect or threat, or are they going to find a way to work with him and future American leaders on a new situation? And I think, based on what I hear from the European head of NATO, I think that they are going to work with him. They may not help him out a lot in Iran, but I think that they are going to continue to contribute to their own defense in a bigger way.

MAST: Well, Hunter, briefly, before we go, I want to touch on a story I’m sure we’ll be covering more in the weeks and months to come. But a lot of people were struck this week during the pretrial hearing in the Charlie Kirk assassination case. As evidence was introduced, the judge was visibly shaken at one point by a new video of the killing.

So what do you think will come of this ultimately? Will there be closure, or will the conspiracy theories never dissipate?

BAKER: First of all, I think that all of us were severely shaken. If you had the bad fortune to see the video when it was online, which I did, it was one of the most shocking things I’ve seen in my entire life. And I don’t think I’ll ever have that image out of my head.

But my understanding was that the young man’s family encouraged him to turn himself in. So my presumption is that the evidence is pretty strong, and that this case will bring closure, and that the conspiracies will shut down.

EICHER: Hunter Baker is a senior fellow at the Center for Religion, Culture, and Democracy, and our regular Washington Wednesday analyst. Hunter, thanks. We’ll see you next week.

BAKER: Thank you.

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