There is a surfeit of Churchillisms that can be brought to bear on Obama’s claim that he supports free enterprise—so much so that he just had to bail out the auto companies and throw billions at unprofitable green energy startups. As Milton Friedman liked to say, the capitalist system is a profit and loss system. The losses are just as important as the profits, as they discipline resource allocation. Bailing out losing firms—a cornerstone of modern loser liberalism—assures us of mediocre economic growth. From among the Churchill treasure trove, we’ll settle for just this one today, from a 1947 speech:
When losses are made, under the present system these losses are borne by the individuals who sustained them and took the risk and judged things wrongly, whereas under State management all losses are quartered upon the taxpayers and the community as a whole. The elimination of the profit motive and of self-interest as a practical guide in the myriad transactions of daily life will restrict, paralyze and destroy British ingenuity, thrift, contrivance and good housekeeping at every stage in our life and production, and will reduce all our industries from a profit-making to a loss-making process.