Success shouldn't depend on government favors: Column

This weekend I will join hundreds of entrepreneurs, including Charles and David Koch, at the Freedom Partners Chamber of Commerce meeting in California. Before the negative media coverage begins, I would like to explain what we stand for.

We believe, and history has shown, that nothing is more effective than free markets at promoting happiness, health, and prosperity — not just for the few, but for everyone in society.

My own story shows a glimpse of what the free market can do. In 1970, at the ripe age of 21, I rented a truck to start hauling tomatoes. Today, our company is the world’s largest tomato processor, employing approximately 2,500 people and with $900 million in annual revenues. Most importantly, the products we make are enjoyed by millions of Americans every day — pizza and pasta, anyone?

This is testament to the limitless potential in the free market. We grew because we listened to our customers and created products that people wanted — products that made people’s lives better. This is the essence of a free society. People benefit themselves by benefiting others — a simple concept with revolutionary results.

The entrepreneurs who join me this weekend have similar stories. These men and women spurred economic growth, increased the country’s standard of living, and created new opportunities for countless people. At the root of their successes — and the success of America’s economy overall — is every individual’s freedom to choose for themselves what to do with his or her time, money, and life. In the last 20 years, economies that embraced this principle have lifted nearly a billion people out of extreme poverty.

Yet here in America, both Republicans and Democrats are taking us in the opposite direction. Rather than empower people to make their own choices, politicians have given themselves and unelected bureaucrats ever more control over how the economy works and how people live their lives. They think they know what people need better than the people themselves.

But this mindset only harms the vast majority of people, especially the least fortunate. Simply look at the over-regulation and cronyism that are rampant in America today.

Federal regulations alone annually cost nearly $2 trillion  — or roughly 10% of the total economy — and state and local regulations add billions more. This money should be used grow wages, create jobs, improve existing products, or engage in the innovation that improves people’s lives. Instead, it’s wasted on lawyers, lobbyists and endless paperwork.

Unsurprisingly, entrepreneurship and innovation struggle in this environment. Small businesses pay $7,000 per employee every year complying with federal regulations — 55% more than large companies.I wouldn’t be able to repeat my own success today, and many of my colleagues agree. In fact, more businesses are now dying than starting for the first time in recorded history.

On the other hand, the proliferation of red tape actually helps existing companies — especially big ones. They can absorb the higher costs that hobble their smaller rivals and innovative start-ups. In the banking industry, Goldman Sachs’ CEO Lloyd Blankfein recently stated the Dodd-Frank regulatory system has “raised the barriers to entry higher than at any other time in modern history.”

Which leads directly to the second problem: The rise of crony government policies that benefit the politically favored at their rivals’ expense.

Favorable regulations are only the beginning. Subsidies. Tax credits. Bailouts. Mandates. When politicians and bureaucrats try to direct the economy from their desks, they give well-connected companies endless opportunities to tilt the playing field in their own favor. For many businesses, the focus is no longer on innovating or serving customers — it’s on getting the most favors from government.

That doesn’t lead to the progress that improves people’s lives, as recent history proves. The regulatory and crony bonanza of the last two presidents has led to one of the slowest post-recession recoveries in American history. The wealthy are still thriving. The rest of the country is falling farther behind.

This is a travesty. The men and women who have joined me this weekend in California are dedicated to fixing it. We want to advance well-being for everyone, especially those most in need, by unleashing the power of free markets. There is no more worthy cause.

Chris Rufer is the founder of The Morning Star Company.

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