Honoring Reagan’s Memory in the Most Honorable Way

It is fitting that we are pausing to remember President Ronald Wilson Reagan on
the centennial anniversary of his birth this February, a month that also
includes Presidents’ Day. There continue to be many poignant remembrances and
fitting tributes to our 40th president. Indeed, the Gipper accomplished much,
and we, his countrymen, are grateful.

One of Reagan’s greatest accomplishments was engineering our victory in the
Cold War. And one of the key factors that made this victory possible was
Reagan’s deep understanding of economics. He knew that the Soviet economy was
brittle, weak, moribund. He knew that it couldn’t hold up in an arms race
against our vibrant free-market economy.

In hindsight, the decrepitude of the Soviet Union’s centrally planned socialist
economy is obvious, but it was by no means so in the 1980s. Believing the Iron
Curtain’s propaganda lies and a Potemkin village appearance of prosperity, many
intellectuals, experts, and Sovietologists believed that socialism was the wave
of the future. In the 1980s, the CIA reported to Reagan that the Soviet economy
was vigorous and thriving. The Nobel prize-winning economist, Paul Samuelson,
confidently wrote that the Soviet economy was booming and quickly catching up
to the United States.

How could Reagan be so sure that he was right when most of the experts were
saying that he was wrong?

The answer lies in the fact that Ronald Reagan understood economics better than
any other American president. As my colleague [2]Lee Wishing wrote last week,
Reagan was influenced by the economic writings of Grove City College professor
Hans F. Sennholz. He also read The Freeman, the monthly publication of the
[3]Foundation for Economic Education (it still exists today). This means that
Reagan was familiar with the Austrian school of economics—the only school that
has supplied a logical proof of why socialist economies are inherently
self-destructive and doomed to fail.

The Austrian economist Ludwig von Mises, in his 1922 masterpiece, Socialism: An
Economic and Sociological Analysis, had demonstrated logically the
impossibility of rational economic calculation under central planning. Anyone
who grasped that theory would know, as Reagan did, that the Soviets’ centrally
planned economy was programmed for stagnation and decrepitude—that it was a
paper tiger, and all we had to do to prevail against the Soviet challenge was
to stand firm and keep our government from crippling our economy the way the
Soviet government had crippled theirs.

This points to a scandal, perhaps a tragedy, today. As we commemorate the life
of a great president whose understanding of the superiority of the
private-property order over socialism contributed so much to freedom and
prosperity, both at home and abroad, in the aftermath of the Cold War—the
economic understanding that was one of the key pillars of Reagan’s philosophy
and policies remains largely unknown today. The Austrian analysis of
socialism—one of the greatest advances in economic science and one of the keys
to understanding the 20th century—remains untaught except at [4]Grove City
College and on a few other campuses. As a result, Americans elected a president
who is doing his best to take us in a socialistic direction—the direction of
economic suicide.

As we pay tribute to Ronald Reagan, we look back at an era when people around
the world voted with their feet for capitalism over socialism. Refugees fled
from East Germany to West Germany, North Korea to South Korea, and mainland
China to Hong Kong—always away from less freedom and prosperity toward greater
freedom and prosperity.

Human beings still have the same preference and make the same choice today.
Sadly, though, today businesses and individuals are leaving the United States
in favor of less economically oppressive locations.

Demagogues on the left denounce these people as traitors for rescuing their
property from governments redistributive plans. The rest of us should regard
this phenomenon as a warning sign that, for the first time in American history,
a significant number of people are leaving America so that they can be
economically freer?

If we really wish to honor Reagan’s memory in a meaningful way, then let us
reverse the Big-Government policies that are driving productive citizens out of
our country. Let us remember Reagan’s lesson that government is the problem—not
the solution—to our economic challenges. Let us re-establish America as the
land of liberty, the favored destination of those who love liberty. Ronald
Reagan would be honored to be honored in that way.

— Dr. Mark W. Hendrickson is an adjunct faculty member, economist, and fellow
for economic and social policy with [5]The Center for Vision & Values at Grove
City College.