26 years later, Friedman’s free-market ideas meet NC’s ballot

Twenty-six years ago today, economist Milton Friedman sat down for an interview about freedom and free markets.

On Oct. 1, 2000, Friedman was asked by PBS why freedom and free markets were inseparable. His simple explanation is worth remembering as North Carolina voters prepare to consider three constitutional amendments this fall.

“Freedom requires individuals to be free to use their own resources in their own way,” Friedman said, explaining that the free market allows people to cooperate voluntarily without central direction or coercion.

Winner of the 1976 Nobel Prize for Economics, Friedman argued that the then-new internet would eventually make economic activity more mobile and, therefore, make taxation more difficult. But he singled out property taxes as particularly vulnerable to government overreach because, unlike people and money, property can’t move. For taxpayers, he suggested, that makes property taxes an area where vigilance is especially important.

“Governments can most effectively collect taxes on things that can’t move. That’s why property taxes are invariably the first tax,” he said.

Fast-forward 26 years, and here we are: 65.6% of likely North Carolina voters support a constitutional amendment requiring limits on increases in local property-tax levies, according to the September Carolina Journal Poll. Two other amendments on the ballot also have the support of roughly two-thirds of likely voters.

Early voting starts in two weeks on the three amendments. North Carolina’s proposed property-tax amendment would require the General Assembly to establish limits on increases in local property-tax levies. The separate income-tax amendment on the ballot would constitutionally limit the state income-tax rate to 3.5%. The third would extend the state’s constitutional voter ID requirement to all methods of voting, including mail-in absentee voting.

Let’s focus for the moment on the tax issues.

As North Carolina voters weigh these amendments, the question we should ask is not whether government has value in our lives and communities. It does. The question is whether we should give government free rein to raise taxes and spend more of our money.

Friedman said that freedom means allowing individuals to use their own resources in their own way. Meanwhile, the free market allows large numbers of people to cooperate voluntarily in an economic system without central direction or coercion. With the growth of government regulation and spending in recent years, it is worth revisiting this concept.

How much freedom do North Carolinians actually have to use their own resources in their own way, particularly when it comes to the the tax money we pay?

“Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own,” Friedman said in the interview.

It doesn’t mean government has no legitimate expenses or that every government expenditure lacks value. It means that the person who earns the money has more incentive to think carefully about how it is spent. When government takes more of our money, the burden should be on government to justify it.

That is how we land today, with three constitutional amendments on one ballot that would place additional limits on government power. Each enjoys support from roughly two-thirds of likely voters, according to the latest Carolina Journal Poll.

“Once you get something in government, it’s very hard to get it out,” Friedman said.

That is why constitutional guardrails matter.

Government powers, whether taxation or regulation, can persist once established. A constitutional limit doesn’t eliminate the need for government. It establishes a boundary around what government can do.

And that brings us back to Friedman’s larger point.

“I think it still is true that it takes continued effort to keep a society free,” he said 26 years ago today.

Freedom isn’t something government gives people. It is something constitutional government is supposed to protect. This November, North Carolina voters will have the opportunity to decide whether some of those protections should be written more firmly into the state constitution.