Saturday, August 7, 2021

Nicholas Kerr: Unleashing New Zealand’s Potential and Suppressing Washington State’s—Lessons for Texas

This speech was delivered to the Dallas Chapter of the Bastiat Society on June 17, 2021.

In 1847, French economist Frédéric Bastiat, this society’s namesake, published a facetious petition to the king now known as “The Right Hand and the Left”. In it he laid bare the fallacy of some of his contemporaries that if you simply create more work, regardless of whether it’s productive work, everyone will be wealthier. The proposition he makes to the king is to require everyone to work with their left hand and not their right. He proposes:

No young woman will be idle… Not only will there be more young women employed, but each of them will earn more, for they will be unable to supply the demand; and if competition shall again show itself, it will not be among the seamstresses who make the dresses, but among the fine ladies who wear them.

You must see then, Sire, that our proposal is not only in strict conformity with the economic traditions of the government, but is in itself essentially moral and popular.

This passage captures some of the bizarre policy logic that New Zealand embraced one hundred years after it was published, which several decades later resulted in the country being on the brink of economic ruin. This thinking is also behind the unrelenting series of policies being adopted in Washington state, where my family moved from last August. And the passage highlights the morality and immorality of polices, one area I will focus on today.

Given that the American Institute for Economic Research created The Bastiat Society as a forum for business professionals to help advance peaceful trade and human flourishing, I’ll also discuss the importance of business leadership in advancing free market policies.

While the New Zealand I grew up in during the 1970s and early 1980s was idyllic for most children, its citizens had long been experiencing declining relative living standards. In the 30 years prior to 1982, New Zealand’s rank in the per capita gross domestic product league table fell from third to 32nd.

Government owned all manner of things, including but not limited to: one of the largest hotel chains in the country; a shipping company; both television channels (New Zealand only had two until 1989); many radio stations; most hospitals; major banks; a steel mill and a printing company; all the country’s airports, ports, universities and coalmines; half the country’s forests; and, the only telecommunications, electricity, airline, and rail companies.

Naturally, all these businesses were run incredibly inefficiently at a huge cost to taxpayers. New Zealand, by 1984, was awash in price, wage, rent and interest rate controls along with subsidies, quotas and tariffs. For the average Kiwi, this meant limited choices for most goods or services. The government’s monopoly businesses and regulations over industries it didn’t own also meant limited career choices and prospects.

The primacy of government in the lives of New Zealanders also had many immoral outcomes. The most visible of these was a government restriction on opening hours for pubs, which required them to close at 6pm. It was first put in place in the early 1900s as a temporary measure, but like so many ‘temporary’ regulations it remained in force until 1967. A culture of binge drinking was established. Tens of thousands of the country’s workers, mostly men at the time, rushed from their workplaces to the pub for an hour or less of drinking in what became known as the ‘6 o’clock swill’.

It also resulted in the tacit acceptance of drunk driving, as well as severely inebriated husbands returning home to their wives and children shortly after 6pm. In the late 1960s, pubs were allowed to open until 10pm and further reforms followed. However, this binge drinking culture is a problem the country still grapples with today.

Tariffs of up to 60% on imports of assembled cars protected local car assembly plants and made millionaires out of a few select people such as the Todds, to this day one of the wealthiest families in New Zealand. The tariffs and local content requirements made new cars unaffordable for average New Zealanders. As the Todds got richer by the year, an unintended but very real consequence was that New Zealand’s ranking amongst developed countries for deaths of students due to motorcycle accidents was one of the highest.

New Zealand passed legislation in 1938 to implement universal healthcare. In the sense that there are few things you need to pay for out of pocket, it is free. But, as with most such systems, the government rations care through the use of lengthy waiting lists and determines what the country will or won’t invest in. If you’re unfortunate enough to have a condition that isn’t common, free isn’t much help because hospitals can’t treat you.

In the 1940s, my Uncle Charles was one such case. My grandmother, a single mother on welfare, left my mother at a boarding school run by nuns and traveled by boat with Charles to—you guessed it—the United States for multiple rounds of surgery at Johns Hopkins. The entire ordeal took a full year.

Fast-forward to the 2020s and little has changed. Last September, Melody Klein Ovink presented herself at a Tauranga Hospital with severe pain in her neck. It turned out she has an abnormal tangle of blood vessels around her spinal cord. As an April story in the New Zealand Herald noted:

Doctors told her no one in New Zealand could operate on it so she was going to have to … hope it didn’t bleed again because it would likely kill her.

Fortunately, she found a doctor in Arizona who has performed over 1,000 surgeries of this type. Left high and dry by the country’s healthcare system, Melody began to raise the funds for her treatment before the government granted a request to pay for the costs. In other words, 80 years since my uncle’s case, the only thing that has improved is you no longer need to travel by boat to America for conditions the country doesn’t have the resources to treat.

While New Zealand healthcare still suffers from the moral decrepitude of socialism, a series of reforms were embarked on in 1984 that touched most other major sectors of the economy. Facing an economic crisis brought on by decades of government mismanagement, the newly installed Labor Party—the country’s major left-wing party—could no longer kick the can down the road and had to confront the challenge head on.

Several important factors combined that gave the country a shot at capitalizing on this opportunity. The Labor Party had elected a gifted bench of MPs who realized New Zealand needed to change the policy trajectory it had been on for so long.

Talent in the public sector had markedly improved in the preceding years, particularly at the Treasury and Reserve Bank, both of which would play critical roles in the crisis. Their leadership had placed special emphasis on recruiting better public servants, as Stephen Jennings, an accomplished economist and now world-leading investor in emerging markets, noted in a 2011 letter nominating my father for a royal honor:

I first met [Roger Kerr] when, as a senior Treasury official, he gave a presentation on the New Zealand economy to students at Massey University. The clarity of his analysis and the sense of personal conviction he conveyed immediately inspired me to become a Treasury official.

Jennings joined the team my father was on that wrote Economic Management, the Treasury’s briefing paper to the incoming government in 1984. It is considered by many as the blueprint for the free-market reforms that followed. Many of Bastiat’s principles that had long been ignored in New Zealand underpinned this paper, including opportunity cost and comparative advantage.

Key economic reforms implemented by the government included:

  • The floating of the New Zealand dollar, the removal of foreign exchange controls, reductions in corporate and individual taxes and the implementation of a broad-based goods and services tax;
  • The removal of price and interest rate controls, and the elimination or drastic reduction of tariffs;
  • Numerous former government departments and agencies were corporatized and registered as public companies. As state-owned enterprises they were given the principal objective of operating as successful businesses. These included the post office, railways, ferries and electricity company. Many were subsequently privatized, including the hotels, banks, telecommunications company, airline, airports and ports;
  • Agricultural subsidies were removed; and
  • The Reserve Bank Act made the bank’s primary focus targeting inflation.

In 1986, my father was approached by the chief executives of the country’s major corporations. They had earlier established an informal group called the New Zealand Business Roundtable and wanted to appoint an executive director to formalize its operations.

My father felt it was important that the business community support the reforms and turn its back on its old habits of lobbying for favors and corporate welfare. As New Zealand businessman Rolf Porter noted in 1971:

New Zealand is possibly the most state socialistic country in the world outside the Iron Curtain and it is we, the industrialists, that have made it so by always running to the government … .

Under my father, the Business Roundtable became a think tank with a formal mission of advancing policies in the interests of all New Zealanders. It favored free markets and limited government.

By 1986, New Zealand had turned the ship of state around, but it wasn’t yet making waves and was still well short of reaching cruising speed. The Business Roundtable was worried that the government’s appetite for further and necessary reform might wane. Its leaders were determined to help maintain the momentum as well as push politicians to address areas of the economy they’d been thus far unwilling to touch.

It’s important to note the challenges they faced. In particular:

  • The media were hostile to the reforms. Newspapers published countless editorials arguing against the majority of them.
  • With the lone exception of the Roundtable, chambers of commerce, and industry organizations such as Federated Farmers and the powerful Manufacturers Federation were almost all universally opposed to the initial waves of reform. The latter’s opposition was not surprising given that, to quote my father, “It used to be said that presidents of the Federation had to be buried six feet deep so that they couldn’t get a handout.”
  • Academics counseled against most of the reforms. Economics professors, for example, jointly signed letters predicting doom if certain policies were adopted.
  • Unions benefited from compulsory membership and collective bargaining agreements. Their members went on strikes and marched in the streets of major cities.

In the early days, the only person Dad employed was the executive assistant he’d brought over from the Treasury. Indeed, over the 25 years he ran the Roundtable the total number of employees, including him, averaged about three. To counter the factors working against the organization, my father had to find ways to scale. The most important method for doing this was to lean on the chairman, vice chairman and other board members to stand on the front lines of the policy debates.

The chairman, Sir Ron Trotter, led the country’s then largest business, Fletcher Challenge. Its deputy chairman, Lion Nathan CEO Douglas Myers, was for a long time the country’s richest man. Sir Ron, Myers and other member CEOs delivered speeches to audiences up and down the country making the case for further free market reforms.

I recall Dad telling me with some delight one year in the 2000s that he’d noticed three board members had the first name William. He signed them up to jointly deliver talks in several cities and marketed them as a “Triple Bill”. While it would have been easy for the media and policy makers to ignore a little-known head of a think tank, speeches by executives of the country’s largest companies made the news.

During his time as chairman, Trotter delivered more than 20 speeches and at his peak gave three within three months. The topics covered labor market reform, education, capitalism, productivity, commercial law and more. Douglas Myers’ output was similar as deputy chairman and later chairman. The two would also regularly join my father to meet with politicians and the media to explain and advance the policies developed by the Roundtable. Not only did their efforts provide necessary cover for the government to press on with its policy agenda, but they also started the debate for other important reforms.

As privileges and protections disappeared, these reforms resulted in short-term pain for some Roundtable members. For example, one of Alan Gibbs’s companies, Ceramco, went into liquidation in the late 1980s when import restrictions on tableware were removed. However, the board members were convinced of the long-term benefit for all Kiwis.

Despite the tectonic changes that rippled through the economy, New Zealanders let the Labor Party know that good policies can be good politics by reelecting it with an even larger share of the vote in 1987. The Roundtable also no longer stood alone when it advanced its policy agenda. For example, in 1989 it published a joint study with Federated Farmers, previously one of its staunchest opponents. Together they made the case for major reform of the country’s inefficient government-run ports.

Rent-seeking by business lobby groups also became a thing of the past, a stance that endured. In a remarkable turn of events, in 1997 all the major business organizations rejected $100 million of business-assistance that the recently elected coalition government had negotiated.

The results of the reforms and the consistent efforts of the Roundtable leadership also slowly brought many in the media alongside or caused them to be not so implacably opposed to the organization’s policies.

Academics proved harder to convert. One tactic for countering them was to bring out experts from around the world. The dozens of guests the Roundtable flew in includes a veritable who’s who of leading figures in their fields. Among them were: Thomas Sowell of the Hoover Institute; Tyler Cowen of George Mason University; British historian Paul Johnson; and Father Robert Sirico of the Acton Institute.

While countering local academics, these experts also helped the Roundtable to scale. Speeches by these visitors were subsequently published. Guests would also meet one-on-one with journalists, generating substantial media coverage.

On his fourth visit to New Zealand, Richard Epstein, one of America’s most distinguished academics on law and economics, offered high praise for the way the organization had successfully scaled in a speech in 2005:

The amount of work that [Roger] and the Business Roundtable have done has been simply extraordinary. I think it is fair to say that in terms of overall output, it has exceeded in quality and in quantity all the work put out by the three major comparable American organizations – the US Business Roundtable, the National Association of Manufacturers and the US Chamber of Commerce.

The first major policy paper the Roundtable published made the case for labor market reform. Special union rights and privileges meant the labor market wasn’t able to easily adjust to shocks or opportunities. The Labor Party considered this a third rail and avoided the issue. Following its reelection and the 1987 stock market crash, the government’s prime minister David Lange famously put the brakes on further reform by announcing it was “time for a cup of tea”.

A second wave of reforms began in 1990 following the election of the National Government (traditionally New Zealand’s conservative party) and included further privatizations, much needed labor market and welfare reform, and a Fiscal Responsibility Act requiring transparency in fiscal policy. Modest healthcare and education reforms were passed but were not transformative.

The Roundtable’s optimism that short-term pain for its members would result in long-term gain was well founded. In the 1990s, unemployment fell to record lows as the labor market was now able to adjust more easily, and GDP growth averaged about 5% annually from 1993 to 1995. For average New Zealanders, this meant not only increased job opportunities but more meaningful ones.

It also meant greater consumer choice as grocery store shelves filled with new brands, and shops offered clothing and other items previously only seen on foreign TV shows. Student deaths due to motorcycle accidents fell because more could afford second-hand Japanese cars that no longer carried steep tariffs. They were rolling off the country’s more efficient ports by the tens of thousands.

Although the National Government was reelected in 1993, the reform momentum largely stalled. However, in the decades that followed, there was no major unwinding of these reforms. The debates had taken place, with a substantial contribution from the Business Roundtable, and governments had been reelected as voters endorsed the need for these policies.

While these reforms are often referred to, quite accurately, as free-market reforms, another way of looking at them is as the removal of an incalculable number of privileges that each benefited the few at the expense of the many. These privileges meant fewer opportunities for New Zealanders to reach their full potential. Once these shackles came off, innovative and entrepreneurial Kiwis started countless new companies and even created new industries.

Washington state has more than its fair share of innovative companies, including Boeing, Costco, Starbucks, Expedia and of course Amazon and Microsoft. However, over the decade and a half that I lived there, the policy trajectory has been in the very direction that led to the crisis New Zealand faced in 1984.

The damage being done by the endless cascade of state and local government legislation in Washington hasn’t yet shown up in many economic indicators. The harm is masked by the presence of some of the largest companies and employers in the world. Politicians there are able to avoid economic reality the same way those in resource rich countries often do, where industries such as oil or mining produce enormous government revenues. Puget Sound’s big businesses and their high-income employees continue to generate more than enough tax revenue to allow political leaders to increase spending year after year and create new entitlements, while introducing new taxes and increasing others.

In 1788, James Madison presciently warned us about what we’re witnessing in Washington in Federalist number 44:

[L]egislative interference, is but the first link of a long chain of repetitions; every subsequent interference being naturally produced by the effects of the preceding.

Take, for example, the regulations imposed on Seattle landlords over the past decade:

  1. Property owners are no longer permitted to select from a pool of rental applicants, but rather must sign a lease with the first qualified renter;
  2. Criminal histories of applicants may not be checked;
  3. Renters may no longer be evicted without cause, and rental agreements may only be ended if the reason for doing so is a cause listed in the Orwellian ‘Just Cause Eviction Ordinance’; and
  4. If a landlord attempts to evict with just cause, the Seattle City Council recently passed a law that will provide renters with access to a free lawyer.

This is merely a sample of the legislative minefield landlords there now face. You might think it’s odd that politicians in Washington profess to be concerned about the cost of housing, yet pile one costly burden on top of another onto those who work hard to provide accommodations. Naturally, rents have been steadily increasing as these costs are passed on to the very people these policies are intended to help. However, consistency and rational thinking usually elude progressive politicians in Washington.

I noted similar inconsistencies when it comes to the policy outcomes for Washington’s minorities in a National Review op-ed entitled, ‘The Incredible Whiteness of Washington State’s ‘Progressive’ Policies’. For example, liberal politicians there have focused on public transport and bike lanes, while entirely abandoning any goals for congestion relief. Longer commutes have been the result. As I explained:

While the Seattle area has been a job-making machine over the past decade, the average number of jobs within a typical commute distance fell between 2000 and 2013 by up to 8 percent for some residents of South King County [a largely minority area]. For those living in Seattle or on the Eastside, both predominantly white areas, the number of nearby jobs rose between 6 and 9 percent.

Much like New Zealand in the 1980s, the media and academics tend to be sympathetic to progressive policies in Washington and are doing little to oppose their onslaught. With the exception of a couple of good think tanks, no one is making the case for individual liberty and free markets. Without business leaders speaking out on their behalf, the think tanks have been unable to scale. Major business groups are either ineffectual or only lobby behind the scenes, usually for favors or exemptions from the progressive agenda for their members.

I told the New Zealand story to countless people in Washington and explained the importance of business leaders entering the fray of policy debates to turn the tide. Many were sympathetic, but to my dismay we weren’t able to rally sufficient numbers to do anything positive. Instead, a small number of prominent business people remain locked in permanent defense trying to say no to the never-ending barrage of harmful policies.

One person I discussed this challenge with was a VP for public affairs of a major national retail chain. He complained to me that retailers have been especially hard hit by these policies. Scheduling laws, a $15 minimum wage and more have imposed major costs on doing business there. The problem, he explained, is that retailers on the chambers of commerce and other business groups get no support to oppose these policies from the influential member tech companies that aren’t impacted by them.

Those on high incomes are generally unaffected by the endless torrent of regulations and legislation that are chipping away at freedoms in the state—they can arrange their affairs to avoid the impact of many of them and the added costs are a small fraction of their salaries. However, fewer job opportunities now exist for the poor and unskilled, and the additional costs are a significant burden, pricing large numbers of them out of city centers. They’re finding it increasingly difficult to reach their full potential in Washington.

Because I was determined to do more, in 2017 I helped some local private sector leaders form the Opportunity for All Coalition and became its secretary. Its main purpose was to defeat an income tax the City of Seattle had just passed on high earners that was clearly unconstitutional. We filed a lawsuit and I was one of its many plaintiffs. Our group raised hundreds of thousands of dollars to finance the successful litigation. The State Supreme Court found in our favor in 2020 as we notched our final win.

During the 2021 legislative session in Olympia that just ended, the Democrat controlled legislature passed a capital gains tax, which is similarly unconstitutional in Washington. Like Groundhog Day, the business leaders involved in the Opportunity for All Coalition are on the defense aiming to raise $1 million to fight this tax in the courts. This cycle never ends and money is never raised to advance a positive agenda.

While all of these policies will ultimately have a negative economic impact on Washington, the progressive agenda is already delivering profoundly immoral outcomes. No doubt many of you have followed the stories about the lawless ‘autonomous zone’ that was established in the heart of Seattle last year, resulting in substantial property damage, crime, multiple shootings and deaths.

Similarly, the city has made national news due to the council allowing the homeless, most of whom suffer from mental health issues and drug addictions, to live in the streets and parks. Law abiding citizens are deprived of public spaces their tax dollars fund while the lives of the homeless spiral out of control as they avoid treatment for the health issues they face. The result is recent headlines such as: “Man beheads Canada goose in front of horrified families at Green Lake”.

When little league started up this year, the homeless living in the tents around the baseball fields cursed at kids and threatened to kill them. Some children witnessed a naked man overdosing. The response from the city? Little league was canceled.

Tolerance has disappeared. With no effective opposition, progressive politicians have resorted to eating their own. Jenny Durkan is Seattle’s first lesbian mayor. Socialist councilmember Kshama Sawant led protesters to Durkan’s house last year. As reported in the Seattle Times, Durkan was:

…targeted at home recently with homophobic and misogynistic messages by left-wing protesters. Individuals at earlier such protests called for her execution…

Despite this sorry state of affairs, our move to Dallas from Seattle last year was unplanned. There were enough good things about the city to put up with the bad. However, learning in late July that our kids would not receive an in-person education in the fall tipped the scales. When we announced our departure, one business leader wrote to let me know he now realized he needed to stand up and be counted:

Because I’ve been afraid to make any enemies with potential clients, I’ve been historically hesitant to share my perspectives, but we’re getting to a point where I have less and less to lose…

For the sake of the city and the state, I hope he and others do start entering the fray of policy debates there. The lessons from New Zealand are that it’s never too late to change course and courageous business leaders can make a difference.

While New Zealand’s reforms are a case study for supporters of free markets, like Washington state it has more recently become a cautionary tale. This may come as a surprise to some given that the country has received glowing coverage for its handling of the coronavirus pandemic. However, the pandemic is partly responsible for the economic trajectory it is now on.

While New Zealand has avoided large numbers of COVID-19 deaths or infections, it’s wrong to suggest that this is due to astute policy choices or excellence in their execution. Rather, it had few choices and got lucky.

When announcing what some described as a “near-complete societal lockdown” Prime Minister Jacinda Ardern noted the consequences of not doing so would be that the:

…health system will be inundated, and tens of thousands of New Zealanders will die.

The country’s health system has always been regularly inundated. Despite essentially zero COVID-19 cases, the latest hospital crisis hit earlier this year and patients were being treated in corridors. A story quoted a doctor explaining that it’s easier to list hospitals that don’t have a major problem than the ones that do.

New Zealand was able to prevent a major COVID-19 outbreak for two main reasons. First, it’s fortunate to be a remote island nation, so it was feasible to shut down the country’s borders. Second, it has a unicameral legislature and no constitution.

Legal scholar and former prime minister Sir Geoffrey Palmer wrote a book describing the political system titled “Unbridled Power”. With few checks and balances on government, so long as a New Zealand prime minister can maintain the support of her caucus, she is essentially free to do what she wants and citizens have almost no recourse to stop it.

Given that background, it’s easy to see how New Zealand was able to impose its draconian lockdown and why almost no other developed countries followed suit. It’s also fortunate that Big Pharma created vaccines in record time, which will limit the economic damage and allow its borders to fully reopen later this year or next.

Although the lockdown has been draconian, given its relative success it’s also been generally popular, especially among the elderly. This resulted in the reelection last October of the Ardern government in a landslide. It no longer relies on a coalition partner to pass its agenda. The New Zealand First party, its former partner, had checked some of its worst excesses.

Until recently, the major economic reforms of the late 20th century had remained largely intact. Governments had only engaged in limited tinkering of them. However, multiple factors that had held them in place have fallen away over time.

There has been a notable decline in talent in the public sector, especially at the Reserve Bank and the Treasury. My father was so concerned about the situation at the Treasury that, before losing his battle with cancer in 2011, he seriously considered returning there to help turn it around again. Government ministers no longer receive the world class economic advice they had come to expect and that provided an important check on their proposals.

As in many countries, the local media is in a perilous financial state, resulting in a loss of quality journalism. For example, Stuff owns many major daily newspapers and the country’s most popular news media website. Its previous owner had valued the company at over AUD$40M, but in 2020 sold it in a management buyout for $1. Last year’s NZD$50M government bailout of New Zealand media companies also raises doubts about impartiality.

Shortly before my father passed away, a friendly takeover of a struggling business think tank was initiated. It was completed after he died and the Business Roundtable was rebranded as The New Zealand Initiative. Today it again stands alone in pushing back against the government’s agenda and advocating for free markets. The chambers of commerce and industry organizations have lost their nerve and returned to some of their bad habits of the past.

The end result of all of these developments is that the Ardern government is now weakening many of the pillars of the free market reforms, including undermining the Reserve Bank and Fiscal Responsibility Acts. Perhaps even more alarmingly, it’s apparently not learned the lesson that bestowing privileges on the few results in enormous costs for the many.

It’s currently in the process of dismantling the central pillar of the labor market reforms of 1991 and bestowing special privileges on unions again. Under its proposed Fair Pay Agreements, unions will be able to force employers to the bargaining table to establish minimum pay and conditions for an entire employment sector. Unions will only need 10% of a workforce or 1,000 employees to agree, which will set up the very likely scenario of a tyranny of the minority in many sectors.

Once again, New Zealanders will have more limited employment choices. While they might like to trade off salaries or conditions with their preferred employer, that will no longer be possible as the entire sector they are seeking work in will have those locked in place. The least skilled will be priced out of jobs altogether.

The Ardern government is also doling out privileges to New Zealanders of Maori descent. For example, it is establishing a Maori Health Authority to deliver healthcare to Maori communities and is exploring passing control of New Zealand’s freshwaters to Maori tribes.

The net result of these developments and an absence of any economic reform momentum for more than two decades is stories predicting the return of a ‘brain drain’ to Australia. One recent piece noted:

New Zealand has a rich country on its doorstep that’s facing labor shortages, that pays better wages and has as affordable or more affordable houses.

Australia didn’t lock down as hard as New Zealand, yet suffered fewer than 1,000 COVID-19 deaths. While New Zealand’s economy shrank a record 2.9% in 2020, Australia managed to grow by 2.2%.

As New Zealand’s free market reforms were taking place, Australian governments were undertaking similar, but less comprehensive reforms. However, unlike New Zealand, governments there have continued to build on them, making steady progress in the decades since.

Amongst other things, this has manifested itself in average annual growth in labor productivity being almost 50% higher in Australia over the past 25 years. The practical result of this is that wages for the same job in Australia are now substantially higher there. New Zealand teachers and nurses, for example, can earn tens of thousands of dollars more a year simply by moving across the Tasman Sea.

Sir Ron Trotter would be very concerned about the policy trajectory of New Zealand and realize that it’s currently on course to become the very thing he warned about in a 2002 speech:

My vision of the future for New Zealand is not as a rest home for the retired, and a trap for the unsuccessful, with a sideline business as a picturesque, low-cost theme park for the wealthy from overseas. We can do much better than that.

New Zealand and Washington state provide important lessons for Texas. If you value liberty and free markets, you need to continually make the case for them. While Texas is free relatively speaking, many freedoms have been lost over the years and there are those who would like to take even more away.

Progressive politicians and organizations have a clear agenda and are making the case to implement it every day. It’s insufficient to rely solely on conservative politicians and free market think tanks here to defend against these efforts.

Another lesson is that if you’re continually playing defense, those on offense will chalk up wins and chip away at your existing freedoms. While CEO Magazine currently ranks Texas number one for business, it’s a relative ranking and the performance of our legislature means we’re barely treading water while other states are advancing their own free market reform agendas.

The best that can be said about Texas’s recent legislative session is that we’re living within our means and post-pandemic we can continue to order to-go cocktails. Meanwhile the number two ranked state, Florida, made strides on school choice and occupational licensing reform, and it relaxed regulations on physician assistants, pharmacists and telehealth, providing its residents expanded healthcare options. If Texas doesn’t advance a more ambitious free market reform agenda, don’t be surprised when Florida overtakes us.

Free markets allow everyone to reach their full potential and deliver morally sound outcomes. Most of us who understand this would prefer to use our time producing and innovating. But if we truly care for the thing that allows us to be productive—the free market—we need to devote some of our energy to defending it. As New Zealand demonstrated, business leaders can make a profound difference.

Several years after selling his mega yacht to Google co-founder Larry Page, former Roundtable chairman Doug Myers passed away. His efforts advocating for New Zealand’s economic reforms were acknowledged in a newspaper in 2017.

Speaking up for further reform was not for the faint-hearted. Myers did so knowing it would not make him popular. He had no personal need to do it. … He did it because, as all who knew him can attest, he fiercely loved this country.

Business leaders who love Texas’s freedoms must not sit on the sidelines. Like Myers and Trotter, they should stand on principle, calling on our governor and legislators to raise their sights and be more ambitious. The freer Texas is, the more we can all reach our full potential.

Nicholas Kerr is an adjunct scholar at the Lone Star Policy Institute. He works in marketing in the tech industry and writes a blog, the Kerrant, on policy and being a father. This article was first published HERE.

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