Perhaps these protesters have poor powers of observation or simply lack fertile imaginations to seek out some new symbol of protest. It does seem curious that there are no known complaints about the global reach of karaoke or the invasions of Asian cuisines that have swept the world.

Surely, there are more karaoke bars in more cities around the globe than there are McDonald’s restaurants. And what about the scourge of Latino songs that have stormed the music world like wildfire? Or things Korean that charm a growing number of admirers among Asians? And who accounts for the sins of Sony and Mercedes?

As it is, would-be activists have cut their teeth on breaking into or tearing down structures adorned with the Golden Arches. Jean Bove, a self-styled French farmer who spends more time on the barricades than on his fantasized farm, was catapulted into stardom by vandalizing one of those hamburger joints. Ironically, no one paid attention to the fact that his act destroyed job opportunities in a rather depressed part of France.

Now McDonald’s has become the target of choice of those who would express outrage against the U.S. retaliatory actions for terrorism directed at the Taliban, Afghanistan’s wannbe government. In neighboring Pakistan, unruly crowds trashed McDonald’s in Islamabad and Karachi. Demonstrators in Indonesia have been slightly more tame with outlets in various cities being cordoned. As if to show their resolve and to make up for their tempered rage, protesters also set upon Pizza Hut outlets and implored diners to stay away.

Although multinational corporations make an easier target for registering complaints about globalization, ubiquitous brands certainly are not limited to the United States. As suggested above, it is simply wrong to portray globalization as a form of cultural imperialism by America or the West. (The favorite target of the predecessors of modern anti-globalists was the Swiss company Nestlé.) Indeed, globalization involves a more complex process of modernization combined with internationalization. Those who would pretend it is otherwise are playing a dangerous game.

Attempts to mischaracterize globalization as an American or Western conspiracy resonate of social theories that supported ruinous economic policies in much of the postwar period. Generations of Latin American dictators, African despots, and communist commissars condemned their countries to grinding poverty by thinking along these lines.

Causing generations to suffer from economic stagnation is bad enough. Now their modern-day fellow-travelers are encouraging a divisive view of the world that is inhabited by a virtuous “us” and an evil “them.” Under this banner, the downtrodden victims are acting righteously in tilting against the windmills of multinational corporations. Unwittingly perhaps, this fuels the fire that burns in the gut of terrorists.

Granted, there is an apparent convergence toward certain norms or rules that are common to Western cultures, especially as they relate to economic transactions. However, this convergence is the outcome of a natural and evolutionary procedure that arises from voluntary choices by citizens and their governments to engage in worldwide markets. Most of these individual or collective choices are made with the aim of promoting greater prosperity. Consequently, as more countries have opened their economies to global markets, they have found a need to establish certain legal arrangements that oversee contractual agreements.

Part of this trend should be welcome to those who oppose authoritarianism. For there is an unmistakable movement toward institutions that protect individuals and away from authority-based institutions that protect state power. Critiques of globalization are little more than another round in the struggle between conservatism and modernism.

Biggest Losers

If protests and vandalism are successful in undermining global branding, the biggest losers will be consumers, especially those in poorer countries. Whatever the complaints against corporations with global reach, the presence of these brands benefits consumers by lowering information costs. Wishing to protect brands, companies will insure a high level of standardized quality and nondiscriminatory treatment of customers.

The good news is that larger multinationals are unlikely to withdraw completely even from the most threatened markets. They can buy up or into local brands or diversify into products with names that may not indicate the geographic origin of the company.

In all events, the success of branding has spawned imitators in developing countries. In the Philippines, a local burger brand named Jolly Bee bested McDonald’s sales before moving into regional markets and a few outlets in California. Another fast-food franchise operation in Guatemala based on chicken products, Pollo Campero, outsells all competitors despite the presence of all the major chains.

It is a gross misrepresentation to depict globalization as the outcome of a conspiracy of anonymous and mysterious foreign forces. The globalizing impulse is to a large degree the result of preferences for imported products or services that are better or cheaper than what is produced locally.

In this sense, globalization is not merely benign. It reflects an expanding freedom of expression for citizens acting as consumers. Those who oppose these results reveal their own elitist loathing for their fellow citizens and their right to express their choices.

Message to anti-globalists: Your distaste for Big Macs or American policies gives you neither the right nor obligation to stop others from enjoying their Happy Meals. Especially when it causes someone else to lose his job.

Thus far the typical libertarian response to the growing clamor has been to challenge the science behind it. Now it really is the scientific consensus that global warming occurred during the twentieth century. What is not so obvious is that (1) humans caused this warming and (2) this warming is necessarily bad.

Although it is interesting to explore the question of whether science has been perverted in the cause of environmentalism, there is a danger for libertarians in pinning their entire case on this strategy. After all, every serious student of science knows that when it comes to empirical claims, we never achieve certainty. For example, even if today one thinks that there are insurmountable problems facing the theory of manmade global warming, one still must accept the possibility that new evidence or theoretical advances could indicate that the environmentalists are perfectly right. Another possibility is that there is some other, similar disaster lurking unsuspected.

For these reasons, I believe it is crucial to accept provisionally, for the sake of argument, the scientific claims behind the case for manmade global warming. In the present article I will demonstrate that it still would not follow that the taxes and other regulations typically proposed by greens are the best way to address the problem. Just as the free market is still the optimal economic arrangement, regardless of how many citizens are angels or devils, so too does the free market outperform government intervention, regardless of the fragility of Earth’s ecosystems.

When trying to determine if the free market is to blame for possibly dangerous carbon emissions, a logical starting point is to list the numerous ways that government policies encourage the very activities that Al Gore and his friends want us to curtail.

The U.S. government has subsidized many activities that burn carbon: it has seized land through eminent domain to build highways, funded rural electrification projects, and fought wars to ensure Americans’ access to oil. After World War II it played a key role in the mass exodus of the middle class from urban centers to the suburbs, chiefly through encouraging mortgage lending.

Every American schoolchild has heard of the bold transcontinental railroad (finished with great ceremony at Promontory Summit, Utah) promoted by the federal government. Historian Burt Folsom explains that due to the construction contracts, the incentive was to lay as much track as possible between points A and B—hardly an approach to economize on carbon emissions from the wood- and coal-burning locomotives. For a more recent example, consider John F. Kennedy’s visionary moon shot. I’m no engineer, but I’ve seen the takeoffs of the Apollo spacecraft and think it’s quite likely that the free market’s use of those resources would have involved far lower CO2 emissions. While myriad government policies have thus encouraged carbon emissions, at the same time the government has restricted activities that would have reduced them. For example, there would probably be far more reliance on nuclear power were it not for the overblown regulations of this energy source. For a different example, imagine the reduction in emissions if the government would merely allow market-clearing pricing for the nation’s major roads, thereby eliminating traffic jams! The pollution from vehicles in major urban areas could be drastically cut overnight if the government set tolls to whatever the market could bear—or better yet, sold bridges and highways to private owners.

Of course, there is no way to determine just what the energy landscape in America would look like if these interventions had not occurred. Yet it is entirely possible that on net, with a freer market economy, in the past we would have burned less fossil fuel and today we would be more energy efficient.

Even if it were true that reliance on the free-enterprise system makes it difficult to curtail activities that contribute to global warming, still the undeniable advantages of unfettered markets would allow humans to deal with climate change more easily. For example, the financial industry, by creating new securities and derivative markets, could crystallize the “dispersed knowledge” that many different experts held in order to coordinate and mobilize mankind’s total response to global warming. For instance, weather futures can serve to spread the risk of bad weather beyond the local area affected. Perhaps there could arise a market betting on the areas most likely to be permanently flooded. That may seem ghoulish, but by betting on their own area, inhabitants could offset the cost of relocating should the flooding occur. Creative entrepreneurs, left free to innovate, will generate a wealth of alternative energy sources. (State intervention, of course, tends to stifle innovations that threaten the continued dominance of currently powerful special interests, such as oil companies—for example, the state of North Carolina recently fined Bob Teixeira for running his car on soybean oil.)

Private insurers have a strong incentive to assess the potential effects of global warming without bias in order to price their policies optimally—if they overestimate the risk, they will lose business to lower-priced rivals; if they are too sanguine about the dangers, they will lose money once the claims start rolling in. Individuals finding their homes or businesses threatened by rising sea levels will find it easier to relocate to the extent that unfettered markets have made them wealthier. Industrial manufacturers, as long as they are held liable for the negative environmental effects of their production processes—a traditional common-law liability from which state policies intended to “promote industry” have often sought to shield manufacturers—will strive to develop technologies that minimize the environmental impact of their activities without sacrificing efficiency. Government interventions and “five-year plans,” even when they are sincere attempts to protect the environment rather than disguised schemes to benefit some powerful lobby, lack the profit incentive and are protected from the competitive pressures that drive private actors to seek an optimal cost-benefit tradeoff.

If the situation truly becomes dire, it will be free-market capitalism that allows humans to develop techniques for sucking massive amounts of carbon out of the atmosphere, and to colonize the oceans and outer space. Beyond these futuristic possibilities, the obvious responses to global warming—such as more houses with AC, sturdier sea walls, and better equipment to evacuate flooded regions—are again only feasible when the free market is unleashed.

It is the poorest people and nations that stand to suffer the most if the worst-case scenario for global warming is realized, and the only reliable way to alleviate their poverty, and thus help protect them from those effects, is the free market.

Can the Market Meet the Threat Head-On?

In the first section I summarized some of the ways governments inadvertently contribute to the very activities that allegedly cause dangerous global warming; in the second I sketched some of the ways that free markets allow humans to better adapt to climate change. However, I haven’t really tackled the problem directly. Am I conceding that with a worldwide problem the market—which is just dandy for one-on-one interactions—can’t match the concerted “will of the people” working through their elected representatives for a common solution?

Of course not. Even when economic transactions generate so-called negative externalities (activities that shower harms on third parties), I still contend that the free market is the best institution for identifying and reducing the problems.

One way negative externalities can be addressed without turning to state coercion is public censure of individuals or groups widely perceived to be flouting core moral principles or trampling the common good, even if their actions are not technically illegal. Large, private companies and prominent, wealthy individuals are generally quite sensitive to public pressure campaigns.

To cite just one recent, significant example, Temple Grandin, a notable advocate for the humane treatment of livestock, asserts that McDonald’s is the world leader in improving slaughterhouse conditions. While many executives at the fast-food giant genuinely may be concerned with the welfare of cattle, pigs, and chickens, undoubtedly a strong element of self-interest is also at work here, as the company realizes that corporate image affects consumers’ buying decisions.

But that self-interest does not negate the laudable outcome of the pressure McDonald’s has applied to its suppliers to meet the stringent standards it has set for animal-handling facilities. Similarly, to the degree that the broad public regards manmade global warming as a serious problem, companies will strive to be seen as “good corporate citizens” that are addressing the matter. And this isn’t ivory-tower speculation on my part—I can see the “green friendly” ads already.

Critics of libertarianism sometimes denigrate it as a political program of “market fundamentalism” that, if put into practice, would reduce all human values to the price they can fetch as mere commodities. But that is a caricature of the social arrangements advocated by any sensible libertarian. The great figures of classical-liberal and libertarian thought have always recognized the vital contributions that nonmarket institutions, such as churches, families, charities, social clubs, communities of scholars and their students, art foundations, conservation groups, neighborhood associations, and youth athletic leagues, make to the healthy functioning of a free society. What libertarians offer as an alternative to statism is not a social order that judges every human interaction solely on a miserly calculation of profit or loss, but a society in which every desirable form of voluntary association is allowed to flourish, free from coercive interference by the state.

Customary Law

Besides the samples listed above, most libertarians recognize private or customary law as another important, nonmarket source of social order. A historical case in point is the Anglo-American common-law tradition in which legal norms evolved spontaneously from the customs of the people to whom it applied, rather than through legislation and state planning deliberately aimed at achieving some “public good.” The many centuries during which the common law sustained civic order in the face of inevitable divergences between individual citizens’ own interests demonstrate that a successful legal order does not inevitably require state sponsorship. The common law has shown itself to be fully capable of dealing with a number of issues that, while not exhibiting the worldwide scope of global warming, are still similar to our present concern in arising from the cumulative effects of many individual actions, each of which, regarded in isolation, appears to be unproblematic and not subject to legal sanction. For instance, the salmon-fishing streams of Scotland are a valuable natural resource, and the communities along them have developed quite successful institutions for ensuring the value of the streams is maintained, including private policing and legal penalties for overfishing and for polluting the water.

The many cases in which voluntary solutions to problems of collective choice have worked pose an empirical embarrassment for those who argue that “public goods” must be provided by the government. Most advocates of compulsory solutions to pollution abatement, for example, would assert that voluntary efforts will be vitiated by “free riding.” If individuals are not forced to contribute their fair share toward addressing these problems, this argument runs, each person rationally will hold back and hope others will pay for the proposed solution, since any free riders would gain the benefits (such as clean air) anyway. Since almost no one likes to be “the sucker,” it follows that the amount of resources devoted to the provision of the public good will fall woefully shy of the total that would be available if each person gave the amount he’d be willing to give if only he could count on everyone else pitching in equally. The sole solution that can be imagined is for the members of a society to create a “social contract” by which they are forced to pay for pollution abatement.

However, Anthony de Jasay notes in his book The State that this argument is severely flawed. If people cannot solve public-goods problems through voluntary cooperation, how can they rely on politicians’ promises to do so? There is no external authority to enforce those promises. There is only public opinion, the same thing that would enforce voluntary solutions. Moreover, government is itself a “public good” in the sense that free riders benefit from the efforts of those who try to get the government to produce public goods such as clean air.

Is Temperature a Public Good?

Another consideration is that the earth’s temperature isn’t such a public good after all. That is, certain people really do have more at stake, particularly if the warming is moderate. For example, if Manhattan became submerged because of rising sea levels, that calamity would not affect every human being equally. The residents of Manhattan and the owners of its skyscrapers would be hurt far more than people living in inland China. Because all the various potential dangers of global warming affect particular people more intensively than others, it is these groups that (in a free market) would have the incentive to reduce CO2 concentrations. For example, if rising sea levels would cause $10 trillion in damage to a comparatively small group of wealthy individuals, that’s a huge “pie” that the wealthy can offer others to motivate them to reduce emissions.

Despite my optimism about the potential to deal with environmental problems through voluntary means, I don’t wish to be misunderstood: If the official global-warming story is true, it presents a serious problem that humanity will find difficult to solve through voluntary means. But this isn’t a strike against voluntarism—of course a difficult problem will be difficult to solve! By the very same token, the government doesn’t do a terrible job at collecting stray dogs, because that’s a very simple task. When it comes to harder assignments, such as stopping terrorism or reducing teen pregnancy, the government’s record is quite a bit worse.

The very features of the official global-warming scenario that hamper purely private solutions would apply equally to government efforts. For example, even if the U.S. government passed draconian measures at home, that alone wouldn’t be enough if China and India don’t follow suit. And just as private companies in a free market may have an incentive to pollute if they can get away with it, so the state, under the influence of special-interest groups and run by leaders always tempted to ignore the public good in favor of increasing their own power and wealth, can have incentives to allow more pollution than is optimal. (It should be clear the “best” amount of pollution is not zero, because even using fire to cook generates some pollutants, and I doubt that anyone but the most misanthropic, fanatical nature worshippers want to reverse all of the last 40,000 years of human progress.)

As in all debates over public versus private choice, it’s inappropriate to measure a realistic free-market response to global warming against an idealized government program. We must try to envision what real people would do if their property rights were respected and compare that scenario with the probable outcome of actual politicians in today’s world being given a blank check in the name of saving the earth.

Government programs don’t ameliorate world poverty or sickness, and no libertarian would deny that these are serious problems. So even if manmade global warming is a real threat, why should we expect governments to get it right on this issue?

Perhaps it is the emphasis on youth in marketing and advertising—aside from a few prescription-drug commercials these days—that creates the impression that the rich are all young or have their career paths set by age 30. In fact, however, America’s business landscape blooms with people who didn’t hit their stride until they reached 50. Opportunity sometimes knocks later rather than sooner, but as the following examples show, what is important is whether or not you are ready to open the door.

John K. Hanson (born 1913), who was a furniture dealer after World War II in Forest City, Iowa, came up with the concept often associated with older people, the Winnebago motor home. He once accepted livestock in payment for couches and tables, even drawing the attention of Time magazine in 1947. Concerned his little town might be shriveling with the decline of family farming, Hanson pondered ways to save the town. Rather than run to the government for aid, Hanson noticed (ironically, also in Time) an article about the camping and trailer boom in California. After researching the project in person, he convinced more than 200 local townspeople to invest $50,000 in a corporation to manufacture travel trailers for a California company.

That venture failed, however, not long after the first trailer came off the assembly line. Hanson, convinced that the outdoors movement was a trend, bought out some investors and encouraged others to stay in and give the project another try. At Winnebago Industries he copied Alfred Sloan’s model at General Motors: have plenty of variety in cost, luxury, and accessories. After ten years the company had 20 models of campers and mobile homes, all making use of Hanson’s innovative foam-rubber cushions and mattresses that made the units more comfortable and thus more profitable. He also introduced the “unbalanced panel,” in which plywood and aluminum sandwiched a layer of Styrofoam insulation, which proved lighter and cheaper than existing “balanced” panels.

By 1965 Winnebago reached $2.8 million in sales, offered stock to the public, and soon became the first exclusively recreational vehicle firm listed on the New York Stock Exchange. After retiring, Hanson watched Winnebago stock slide from over $80 to a low of $1.75 in 1979. Coming out of retirement at age 65, Hanson brought the company back to profitability, although it was difficult. He had to fire more than 3,200 employees: “I came in like Wyatt Earp. I just lined ‘em up and shot ‘em down.”¹ But he saved the company, and for the second time, saved the town. Reflecting back on whether he could have started Winnebago at an earlier age, he concluded there was no way. He did not have the experience or knowledge.

A more colorful and bombastic figure, Phineas Taylor “P.T.” Barnum experienced success even later in life. Barnum (born 1810) was a natural salesman, who loved a practical joke. A prankster as a child, he once pushed a scam too far when he had a friend spread the word around town that he was an escaped killer. A mob nearly lynched him. But this, and other experiences, convinced Barnum of the incredible power of hype—that publicity could sell anything. In 1835, he managed the American Museum, where he displayed a woman he claimed was 165 years old, and when public interest declined, he wrote articles to the local papers under pseudonyms accusing him—Barnum—of fraud regarding the exhibit, and attendance again soared. Although he never admitted it, one of his main attractions at the museum was the “Feejee Mermaid,” a creature that Barnum had apparently sewn together from a monkey’s head and a large fish’s tail.

No matter what the exhibit, though, Barnum learned that if you promoted it with “the largest” or “greatest,” or “most spectacular,” people would come to see it. But he also knew which acts sold, bringing the famous Jenny Lind, the “Swedish Nightingale,” to America for a tour. Typically, Barnum’s promotional skills produced a crowd of 30,000 to greet her.

Barnum went bankrupt in 1855 after getting involved with a clock-making company in which he was himself swindled. Embarrassed at being out-hustled, he rebuilt his fortune around exhibits of wild animals and birds. Collaborating with a circus group, Barnum conceived of the notion of moving the animals from town to town by railroad, although he still was not showing a profit. In 1880, however, he encountered the London Circus, run by James Bailey. They merged, with Barnum handling the promotion. Thus it was not until P.T. Barnum was 70 that the famous Barnum and Bailey Circus became a solid business.²

Fast Food at Fifty

Someone almost as well-known as Barnum, McDonald’s founder Ray Kroc, likewise did not come into his own until middle age. Kroc was a 52 year-old Dixie Cup salesman when he learned of a new product called the Multimixer, which mixed several milkshakes at once. When Kroc quit his paper-cup job to sell Multimixers, he became acquainted with Mac and Dick McDonald in San Bernadino, California. He observed their fast-food operation firsthand in 1954 and was amazed at the assembly-line production. All the operation needed, he thought, was his Multimixers. Working out a deal with the brothers for the name, Kroc opened his first location in Des Plaines, Illinois, and after more than a year, he had enough money to open other locations. Within five years Kroc, well past the mid-century mark, had 200 restaurants. Within another seven years the company would open 100 new stores per year.³

Less well known, but nearly as successful, were two other middle-aged masters of sales, Lowell Paxson (born 1934) and Roy Speer (born 1932), co-founders of the Home Shopping Network in 1982. Paxson had owned an AM radio station in Clearwater, Florida, but found FM radio stealing his listeners. He had difficulty selling ad time, so he experimented with selling products directly. Acquiring overstocked products from local merchants, he premiered a show called “Suncoast Bargainers.” After cable television penetrated the market, he decided to make the move to TV, where people could see the goods.

Paxson found his business and management skills wanting in some areas, so he looked for a partner. He found Roy Speer, a man nearly his own age. The two opened Vision Cable System in Clearwater to carry the Home Shopping Channel. Initially only 200,000 cable subscribers saw the show. Still, the duo had nearly $900,000 in sales after a year. They looked for an opportunity to go national, and in 1985, the Home Shopping Network began broadcasting 24 hours a day, earning $6 million in six months. Demand was so great that a year later, they started HSN2, a second network featuring more upscale, name-brand merchandise such as Gucci and Yamaha. Although the “rocket ride” that the two men experienced slowed in the late 1980s, when Sears and J. C. Penney started direct sales on cable, the success of Paxson and Speer seemed to confirm the adage that life begins at 50.⁴

Tonic and Soft Water

Probably few entrepreneurs had as hard a road to hoe as Lydia Pinkham, a housewife whose husband, Isaac, was in a wheelchair and who had five children to feed. The Panic of 1873 had pushed the Pinkhams into abject poverty, and out of desperation Lydia began selling a vegetable compound for “female complaints”—a term that covered a number of discomforts related to women’s anatomy. Manufacturing the tonic in her basement, she sent her two sons to sell and distribute the product, using their wages to purchase supplies. Husband Isaac wrote copy and stuffed envelopes. The family’s break came when an ad placed in the Boston Herald brought in large orders. By that time, Lydia was 60 and had her own image placed on the bottles. A new ad campaign, using streetcar signs, magazines, and bottles, made Lydia Pinkham a household name. Her share of misery did not end, though, as both sons died of tuberculosis, at which time Pinkham, then nearing 70, sold the business.⁵

Emmett Culligan was certainly younger than Lydia Pinkham when he invented his water-softener equipment in the early 1920s, but he did not make a go of his business until he was close to 50. In business terms, though, he had already lived two lifetimes. Culligan had been worth $200,000 at age 28 when the value of his lands plummeted and forced him to move home with his mother. Meanwhile, he had experimented with a filter that removed hard minerals from water using a natural greensand called zeolite. Borrowing a bag of the sand, he experimented until he perfected the device. Opening a new firm in St. Paul in 1924, Culligan immediately got into patent squabbles and found himself broke again. After resolving the dispute, he continued to believe in the water filter and concluded that he merely had to find a way to bring the price down to see heavy sales.

Culligan also understood that no matter how good the product was, it would not just “sell itself.” Creating the right type of sales force was key. Ready to try again in the middle of the Great Depression, Culligan opened a new company in Northbrook, Illinois. Using new machinery, he got the price down, but the sales gimmick that proved successful was a guarantee that the customer could cancel service anytime. Continuing to sell during World War II, by V-E day, Culligan had nearly half a million subscribers. Previously he had hired salesmen to copy the tactics of vacuum-cleaner salesmen or the famous “Fuller Brush Man.” But by the 1950s times had changed, and Culligan altered his approach. An ad company in 1959 came up with the famous line, “Hey, Culligan Man,” which characterized all the company’s promotions. By the early 1960s, sales had doubled, and Emmett Culligan, having made his fortune after he was 50, retired before he lost another.⁶

Mary Kay

Opportunity is no respecter of persons or circumstances. Consider Mary Kay Ash (born 1915), whose life resembled a movie, something like The First Wives’ Club. Supporting her husband by selling cleaning supplies and conducting in-home demonstrations, Ash attained a top position and a good salary in a direct-sales organization. She was repeatedly passed over for promotions, however, even after outperforming male counterparts. Then, having gotten her husband’s company off the ground, she found herself served with divorce papers. Already in her late 40s with a family to support, she took more sales positions, until she encountered a woman who had developed her own skin products. Purchasing these, Ash started her own company in 1963 under the name Beauty by Mary Kay. She conceived the sales tactic in which a woman would host an in-home beauty show, or party, for her friends in return for certain rewards. Most of Ash’s sales force were women—many in the same position as she had been—and she emphasized incentives as a means to boost sales. Although she gave out bonuses, vacations, and other prizes, the most famous of her incentives was a car. At first she gave away pink Buick Regals, but eventually upgraded the prize to the famous Mary Kay pink Cadillac.

By the late 1980s Mary Kay had 120,000 employees and had established itself as one of the leading cosmetics/beauty companies in the world. When she died in 2001, Mary Kay had created an empire, all of it after age 50.⁷

If the stories of these eight individuals tell us anything, it is that opportunity knocks, although sometimes later rather than sooner. The key is to be ready to open the door. More important, though, most of these successful entrepreneurs failed and struggled, some of them for decades, before finally landing on the product or service that made them famous. Resilience, determination, and a refusal to view age, poor health, marital status, or any other circumstance as an impediment moved these men and women to the forefront of their businesses.

Notes

1. Quoted in Joseph J. Fucini and Suzy Fucini, Experience, Inc. (New York: Free Press, 1987), p. 64.
2. Phineas T. Barnum, Struggles and Triumphs, or, Forty Years’ Recollections of P.T. Barnum (Buffalo, N.Y.: Courier Company, 1878), and Irving Wallace, The Fabulous Showman: The Life and Times of P. T. Barnum (New York: Knopf, 1939).
3. Ray Kroc and Robert Anderson, Grinding It Out: The Making of McDonald’s (Chicago: Contemporary Books, 1977).
4. See Fucini and Fucini, pp. 89–95.
5. Robert Sobel and David B. Sicilia, The Entrepreneurs: An American Adventure (Boston: Houghton Mifflin, 1986), pp. 193–96.
6. Emmett Culligan, “Softeners Rented,” Business Week, December 28, 1946, p. 21, and Joseph J. Fucini and Suzy Fucini, Entrepreneurs: The Men and Women Behind Famous Brand Names and How They Made It (Boston: G. K. Hall, 1985), pp. 99–101.
7. See P. Rosenfield, “The Beautiful Make-Up of Mary Kay,” Saturday Evening Post, October 1981, pp. 58–63, and Larry Schweikart, Entrepreneurial Adventure: A History of Business in the United States (Ft. Worth, Tex.: Harcourt, 2000), pp. 504–505.

The interesting title is chosen as a metaphor for the choice Friedman says today’s societies face. They can pursue fancy cars like the Lexus by moving toward free trade, sound accounting, transparency, property rights, and the rule of law. Or they can continue to fight over olive trees through tribalism, nationalism, and isolation. As metaphors go, it’s not a bad one. Each choice offers benefits and pitfalls, but if you value freedom and prosperity, your society had better go for the Lexus.

Friedman sees globalization as the One Big Idea of the post-Cold War era. But joining the global village is not easy; it requires a nation to put on what Friedman calls the “Golden Straightjacket.” That’s private property, low inflation, shrinking government, free trade, deregulation, currency convertibility, reduced corruption, open markets, private pensions, and so on. In short, a libertarian dream.

Once you join the global world, you had better wrap the Golden Straightjacket pretty tight because if your country is seen to be at all weak on any part of it, you might get a visit from “The Electronic Herd.” That’s you and me trading everything from T-bills to Russian bonds. When the herd gets spooked—when we worry about Russian inflation for example—the herd can create a major crisis overnight. Friedman is one of the few journalists to actually understand the nature of the Asian/Russian currency crisis. Sure, people like Malaysia’s Prime Minister Dr. Mahathir Mohamad can blame it on George Soros or the Jews, but the real enemy was TIAA-CREF, e*trade.com, and Merrill Lynch.

The Electronic Herd can be unfair, even wrong, but to fight it is useless. You either embrace the Herd, and the discipline it mandates, or you’d better get off the range. In this, Friedman is less an advocate for globalization than the deliverer of the bad (or good depending on your perspective) news. His major point is that globalization is here to stay whether you like it or not.

Friedman loves his metaphors, though they sometimes get on one’s nerves. One of the more effective chapters is “DOSCapital 6.0.” Friedman describes countries as computers. Communist countries were running on a really bad operating system, DOSCapital 0.0 while others have advanced to DOSCapital 1.0 up to 6.0. The more free market your country, the more advanced your operating system. It is interesting to compare his list of countries with one of the economic-freedom indexes now available. Perhaps Taiwan is too high and Thailand too low on his scale, but basically he got it right.

In another interesting chapter, Friedman notes that “No two countries that both have McDonald’s have fought a war against each other since each got its McDonald’s.” This was true when he wrote it, but unfortunately is not true since the United States attacked Serbia. (Interestingly, the McDonald’s in Belgrade ran strong pro-Serb promotions during the attacks.) But the larger point is that globalization is likely to lead to more peace—a point free-market advocates have made for decades.

But Friedman does have some problems with his analysis. In a series of chapters he goes through some of the pitfalls associated with globalization. Some are real; some are imagined. For example, Friedman worries that globalization will increase income inequality. But as a rule, developed countries have more equal income “distributions” than less developed countries.

Friedman also worries that freer markets and prosperity will lead to greater environmental problems. There is a grain of truth to this fear. Developing countries often make short-term sacrifices of environmental quality to achieve economic growth. Nineteenth-century American cities were filthy messes. But over time development will lead to the willingness and ability to pay for a cleaner environment. To his credit, he grudgingly recognizes this and argues that corporations, not corrupt bureaucrats, are the more likely saviors of the environment, not corrupt bureaucrats.

As Friedman finishes the book, he offers words of caution about the inevitable backlash against globalization. Indeed, as Virginia Postrel argues in her book, The Future and Its Enemies, we do have conflicting visions before us. One is the dynamist world embodied in Friedman’s Lexus and the other is the stasist view of his olive tree. Several thousand World Trade Organization protesters in Seattle were a testament to the power of the olive tree. But the good news is that the dynamist view is winning and it is not easy to see how we can turn back.

This year, as the Czech people celebrate the tenth anniversary of the end of communism, the capital city of Prague serves as a shining example of what happens when the free market displaces economic planning.

Each morning on the Charles Bridge in the center of the city, more than a dozen vendors wheel out their carts and set up their tiny mobile shops under the 30 statues of saints that line either side of the historic bridge. Along the narrow cobblestone streets extending in all directions from either end of the bridge there are shops with doors wide open and merchants smiling at passersby. Salespeople stand on busy street comers handing out leaflets announcing all the plays, shows, and attractions that are available throughout the city. Tourists abound, always ready to exchange their currency for any number of these goods and services.

Freedom has not only sparked the creativity and ingenuity of the local entrepreneurs, inspiring them to grab their own little comer of the market, but it has brought investments from large foreign corporations as well. Among the more noticeable of these is McDonald’s. Prague is home to several McDonald’s restaurants including one in Wenceslas Square. The square was the site of the Velvet Revolution that started on November 17, 1989, and led to the resignation of the communist government on December 3. The revolution was dubbed “Velvet” because of its “soft” nature no one was killed.

The McDonald’s Argument

The presence of McDonald’s excited me because I have for years used the global proliferation of McDonald’s as my premier tool for debating socialists, statists, and others with a general fear of capitalism. I have always known my McDonald’s argument was sound, but my visit to Prague provided the opportunity to verify it firsthand.

I start my McDonald’s argument by getting my freedom-fearing friends to agree that McDonald’s is the perfect example of capitalism run amok. It is, I argue facetiously, a huge American corporation that crowds out the mom-and-pop restaurants by offering low-quality products and paying low wages. Horrible! They quickly agree.

But wait. Morn and pop are doing fine, as are all the dozens of other restaurant owners in Prague. Less than 200 yards from the Wenceslas McDonald’s is a hot-dog stand that sold me the greasiest and best-tasting kielbasa dog I have ever had. Less than 50 yards away is another stand where I bought a chocolate-covered cherry ice-cream bar that puts the McDonald’s sundae to shame.

Throughout the city, food of every form and fashion can be found. From my favorite greasy hot-dog stand in Wenceslas Square, to my love Linda’s favorite restaurant–a French place named U Malíru where the cheapest bottle of champagne was nearly $100–it is quite clear that McDonald’s is not about to monopolize the food market.

As for quality, the concern of my statist friends falls into two categories: taste and health. Taste is clearly a matter of personal choice. The people standing in line for their Big Macs each time we walked by certainly didn’t seem to think that they were being taken advantage of.

As for health, McDonald’s doesn’t seem much worse than the other options. Judging by the pork with cream gravy and dumplings I’ve had at U Kamenného mostu on the east bank of the Vltava river, the cheesecake and espresso I had at the newly renovated Kavfárna Obecní dum, and the occasional kielbasa dog I had when we were on the run, a Big Mac and fries are hardly worse than the fare offered by the small-scale, domestic entrepreneurs.

Low Wages?

If McDonald’s is not flooding the market and the food is not all that bad, then surely there is no excuse for low wages. But what would the employees of McDonald’s do if the Czech government outlawed the chain in an attempt to save the employees from their supposedly wretched lot?

Perhaps the displaced employees could open stands on the Charles Bridge. While selling crafts on such a beautiful and historic bridge certainly seems better than making hamburgers on an assembly line, it requires a level of artistic skill that the majority of citizens do not possess. Perhaps they could open one of those cute little shops on the winding cobblestone streets. Being a small business owner is surely desirable, but running a successful business can be difficult and, again, most people do not have the skill to undertake such a venture.

Although it would be wonderful if we could produce an abundant supply of high-paying jobs by simply outlawing all jobs deemed inadequate, the economic reality is that for these workers at this point in their lives, this is their best opportunity.

So if the competition is not destroyed, customers are not deceived, and employees are not worse off, where is the evil? At this point, my friends are mute. Their silence now provides the opportunity to turn the discussion in the opposite direction and show that, rather than causing harm, McDonald’s (or any large corporation with high division of labor) actually provides a tremendous benefit to competitors, customers, and employees.

Competitors benefit because a McDonald’s employee will not stay there forever. After a few years of ordering cheeseburger wrappers and counting money at night, he will learn the basics of inventory and bookkeeping. Seeing his skills, the competition will hire him away; or he will start his own restaurant and compete against his former employer.

Customers benefit not only in the immediate sense of being served today, but even more so because the McDonald’s employee who asks, “Would you like fries with that?” several thousand times will in time learn to read and anticipate the reaction of customers; when he lands the job at U Malíru, he will be able to know when to offer the $200 bottle of champagne and when to suggest the $100 bottle.

Employees benefit because they receive increased pay and higher job security by having acquired the skills that are desired by employers and enjoyed by customers. Were it not for the large amount of easily obtained employment offered by large, labor-divided companies, such workers would have a much harder time finding opportunities to develop valuable skills.

Indeed, it would seem that large international corporations are not so horrible after all. They integrate peacefully with the economy of the countries in which they operate and benefit an array of people in a variety of ways. I have always known this, but after visiting Prague, I am more confident in this belief than ever.