Creating a World of Free Men

   by Rep. Dick Armey
   Fifty years after THE ROAD TO SERFDOM, the closing thought of F. A.
   Hayek's great treatise (as expressed in the highly influential
   READER'S DIGEST condensation) still rings true: "The guiding principle
   of any attempt to create a world of free men is this. A policy of
   freedom for the individual is the only truly progressive policy."
   Sometimes we forget how radical this statement was in 1944. Hayek's
   little book evoked contempt from his fellow intellectuals. To suggest,
   in the midst of the Second World War, that central planning does not
   work and is generally self-defeating and dangerous was a dramatic
   statement that the political class could not accept. To argue that
   government should be so limited as to be able to do little beyond
   protecting life, liberty, and property was antiquated, eccentric, even
   bizarre. And yet, today, looking back over the decades, who would say
   that the socialists and central planners ere right, and Hayek wrong?
   Events, of course, have proved him prophetic. Indeed, he had the good
   fortune to live long enough not only to see national socialism smashed
   but also to see Soviet socialism relegated to the ash heap of history.
   And I'd like to think he is up there somewhere tonight smiling down on
   us, as big government liberalism follows those two great, tragic
   "isms" into oblivion.
   What was it that so enraged left-wingers about Hayek? It was the
   assertion that liberal paternalism is just as dangerous to humanity in
   the long run as fascism or communism. Liberalism, he argued, differs
   from those evil systems only in degree, not in kind. Hayek was a
   humble man, genuinely humble before reality. And that humility gave
   his words the boldness of honesty and the audacity of truth. And the
   liberals could not forgive him.
   Reading back over THE ROAD TO SERFDOM, I could not help thinking of
   the old quip that a conservative is someone who says, "I'll believe it
   when I see it," and a liberal is someone who says, "I'll see it when I
   believe it." While Hayek always called himself a liberal in the
   classical sense of "one who is for liberty," he was truly conservative
   in the sense I'm talking about. He never thought human nature or the
   constitution of reality could be changed or reshaped by force of will.
   He was a rarity, an intellectually honest man in an intellectually
   dishonest age. What an ideal name for an auditorium dedicated to the
   promotion of human freedom.
   And what an ideal think tank to have helping our new majority
   transform Washington. Your devotion to truth, like that of Hayek, has
   cast you as mavericks. It has put you at odds with the received
   opinions of the conventional left and right. But it is that principled
   consistency that has made the Cato Institute so "hot" these days. I
   mean, who would have imagined, a year ago, that the leaders of
   Congress would be looking to those crazy libertarians over at Cato for
   advice? Who could have imagined we would be discussing abolishing
   whole programs, turning others back to the states, repealing
   ill-conceived laws, and dismantling cabinet agencies, just as you've
   always recommended?
   You have been successful because you believe what Hayek never ceased
   to point out--and indeed what the entire 20th century makes
   plain--that freedom, and only freedom, works.
   What a hopeful time this is. Socialism is finished. The liberal
   welfare state is passe. And I'm more optimistic than I've ever dared
   to be that we are entering a new era of limited government. Congress
   is run by Americans who believe ordinary people can be trusted to
   spend their own money and make their own decisions. We will send power
   back from the hallowed halls of Congress to the more hallowed kitchen
   tables of America, where night after night families bow their heads in
   thanks and make decisions about education, charity, jobs, spending,
   debt, and personal behavior with a wisdom and a compassion that no
   agency head, no cabinet secretary, no member of Congress could ever
   Just today, we shook the foundations of Washington by doing something
   that hasn't been done for a quarter century. We proposed a balanced
   True to our word, and despite the skeptics, we've produced a specific,
   detailed plan to balance the budget in seven years. And we get there
   with real spending cuts. No accounting gimmicks. No tax increases. In
   Hayekian fashion, we asked basic questions: Does the typical American
   family really need a Department of Commerce? Could our children learn
   without an Education Department? Could the Republic survive without a
   National Endowment for the Arts? Would the economy grind to a halt
   without an Interstate Commerce Commission?
   While this budget faces a tough road, we believe the American people
   demand no less, for the sake of freedom. Americans want not just a
   smaller government, but the government of the Framers of the
   Constitution. And that's what we intend to restore.
   Can I give you a peek at where we're headed? Just look at Estonia.
   Three years ago that tiny republic was a typical, ex-Soviet basket
   case, with negative growth, staggering unemployment, and skyrocketing
   inflation. But in late 1992 Prime Minister Mart Laar's reform
   government decided to throw the dice. They abolished all tariffs. They
   privatized 90 percent of state-owned enterprises. They scrapped every
   last subsidy, right down to farm subsidies. To create a sound money
   supply, they threw out the worthless ruble and created a new local
   currency, pegged to the German mark. Here's my favorite part: They
   established a flat tax. And yes, they balanced their national budget.
   What's the result? Today, the Estonian economy is growing at a
   vigorous 6 percent a year, twice America's growth rate. Unemployment
   is just 2 percent. Inflation has collapsed from 1,000 percent to 40.
   Sixty thousand new private businesses have sprung up in a population
   of only two million.
   Mart Laar came to my office the other day to recount his country's
   remarkable transformation. He described a nation of people who are
   harder working, more virtuous--yes, more virtuous, because the market
   punishes immorality--and more hopeful about the future than they've
   ever been in their history. I asked Mr. Laar where his government got
   the idea for those reforms. Do you know what he replied? He said, "We
   read Milton Friedman and F. A. Hayek."
   Ladies and gentlemen, if Estonia is not a vindication of everything we
   believe in--from free trade to privatization to sound money to
   balanced budgets--I am at a loss as to how else one COULD validate our
   ideas. To quote my friend and hero, Thomas Sowell, we don't have FAITH
   that freedom works. We have evidence.
   And by the way, if I can advertise for a moment, it turns out
   Estonians LOVE their flat tax. They like the postcard-size return.
   Compliance has actually gone up. People are willing to pay their taxes
   voluntarily now, because they feel the system is fair. Their only
   complaint: They think the rate is too high. But of course, there's an
   easy way to cure that.
   And speaking of taxes, isn't it amazing that the debate over how we
   restructure America's tax system for the next century is coming down
   to a contest between a flat tax and a consumption tax? How far we've
   As I say, I'm hopeful for the future of freedom. But I do have
   concerns. Let me just mention one. More and more these days,
   immigrants are being viewed as if they were the source of America's
   problems. It seems the old Malthusian notion that people are a drain
   is making one of its regular revivals. Well, it's good to know Cato
   has always held fast against that misguided teaching. At a time when
   some are turning against immigrants, you continue to view them as
   human beings, in Julian Simon's beautiful phrase, as the ultimate
   Anti-immigration has always been ironic, because throughout our
   history newcomers have been a source of strength, not weakness.
   America still
   attracts the world's best talent. And surely that is no liability.
   Think of it. We can avail ourselves of much of the world's
   intellectual wealth simply by opening our doors. America never has to
   grow old. We can always take in new talent and new ideas and new
   blood. No ruling elite can dominate us for very long, because we
   always have younger, smarter, more entrepreneurial spirits willing and
   eager to move up.
   The impulse to limit immigration is really a manifestation of the
   protectionist impulse. And it's misguided. It's a desire to use
   government's monopoly of coercive power to benefit oneself at the
   expense of somebody else. And that, as Hayek taught us, is
   self-defeating. But the biggest problem with the closed-border idea is
   that it embraces the liberals' world view. And thus it leads logically
   down the path to bigger government.
   Should we have an orderly immigration policy? Of course. Should we
   give the Border Patrol the appropriate tools? Of course. But in so
   doing, should we infringe on the personal liberties of law-abiding
   Americans? Absolutely not.
   We need immigration reform. But our goal should be to make immigration
   more orderly, not more restrictive.
   We have too many immigrants coming here to get on welfare. But the
   reasonable response is not to build a police state. It's to shrink the
   welfare state.
   We have an educational system that no longer promotes assimilation.
   But the sensible response is not to exclude foreign children. It's to
   scrap multiculturalism in the schools and give parents real school
   Should we reduce LEGAL immigration? Well, I'm hard-pressed to think of
   a single problem that would be solved by shutting off the supply of
   willing and eager new Americans. If anything, in the spirit of Hayek,
   we should be thinking about INCREASING legal immigration.
   Should we turn private employers into auxiliary border guards? I think
   unfunded mandates are bad enough without that.
   And as for a national ID card, which I understand the administration
   is considering, let me just say this. I oppose it. And I will fight
   it. Let me be clear here. What some are calling a "national computer
   registry" is just a euphemism for a national ID card. And any system
   in which Americans would be forced to possess such a card, for any
   reason, is an abomination and wholly at odds with the American
   tradition of individual freedom.
   Lest I close on such a defiant note, let me leave you by saying how
   much comfort it gives me to know that when it comes to that issue, as
   so many others, we'll be able to count on our good friends at Cato.
   The coming months promise major battles with the liberals over
   spending, taxes, crime, education, the environment, welfare, property
   rights,and a hundred other issues. And, as always, Cato will be there
   for us, arming our legions of righteousness with facts, statistics,
   policy briefs, and four- color charts.
   For like the great man we are celebrating tonight, you have the
   boldness of honesty and the audacity of truth. You believe, as he
   always reminded us, that true human progress lies, not in power or
   planning, but in markets and the rule of law. It is with those
   safeguards, and those alone, that we may dare hope to avoid the road
   to serfdom and "create a world offree men."