October 15, 2014 4:45PM

Friedman Prize Winners in the News

Every two years, the Cato Institute awards the Milton Friedman Prize for Advancing Liberty to an individual who has made a significant contribution to advancing human freedom. More than anything, past winners have embodied the old adage that the price of liberty is eternal vigilance.

It should therefore be no surprise that Milton Friedman Prize winners continue to show up in the news, pushing for freedom and standing up to power. In recent days, three awardees have appeared in the news because of their unyielding commitment to the principles of individual liberty, limited government, free markets, and peace.

Mao Yushi

In September, the ruling Communist Party in Beijing announced that the people of Hong Kong, who have enjoyed considerable autonomy since the city’s transition from a British protectorate in 1997, could only vote for electoral candidates that were pre-approved by the Communist Party. Protesters bravely took to the streets and have faced strong-arm tactics from the police, including beatings and pepper spray. Beijing has refused to budge and this week “made its highest-level denunciation yet of the protesters,” reports the New York Times, “accusing them of pursuing a conspiracy to challenge Beijing’s power over the city.”

The authorities in Beijing aren’t satisfied with cracking down on protests in Hong Kong; they are also curtailing freedom on the mainland. Mainland supporters of the protesters are being arrested. And as the Washington Post reported this week, “books by scholars considered supporters of the demonstrations are suddenly becoming harder to find,” as Beijing imposes an apparent ban on material critical of the government.

Mao Yushi, awarded the Milton Friedman Prize in 2012, is one of those scholars. Mr. Yushi is an economist and one of China’s most outspoken activists. In response to the news that his books were being censored by Beijing, Yushi wrote, “A national government organ is daring to risk universal condemnation, in open opposition to the constitution. What is our government actually trying to do?” His internet post was then swiftly deleted by government censors.

Fortunately, Mao Yushi has overcome much worse repression. Under Mao Zedong, Yushi wrote in the Washington Post just weeks before the Hong Kong protests broke out, “I was labeled a ‘rightist’ and persecuted, along with thousands of others. We were removed from our posts and sent to the countryside for ‘re-education.’ I was reduced to the lowest human form, constantly stalked by the nightmare that I could never shake: hunger.”

Read Mao Yushi’s article in the latest issue of The Cato Journal and the corresponding Op-Ed in the Washington Post.

Hernando De Soto

The rise of ISIS, the terrorist group in Syria and Iraq, reminds Hernando De Soto of how he helped battle a radical terrorist group in Peru. And he didn’t do it with bombs. He did it through capitalism.

Hernando De Soto is a renowned economist whose work has focused on the lack of formal property rights as the source of poverty in poor countries. In his native Peru, De Soto helped initiate sweeping reforms that instituted property rights and a formal legal system for the country’s vast network of informal enterprises. The Peruvian government reduced the complicated red tape that was hindering economic activity by 75 percent. Hundreds of thousands of informal business were recognized and millions of jobs were created.

De Soto wrote about his efforts in two famous books, The Other Path and the Mystery of Capital. In 2004, the Cato Institute awarded him the Milton Friedman Prize.

Beyond lifting people out of grinding poverty, the reforms inspired by De Soto’s insights also undermined the violent communist guerrilla movement in Peru called The Shining Path, which had killed up to 30,000 farmers by 1990 who had “resisted being herded into mass communes.” By unleashing Peru’s untapped economic potential, the reforms effectively stole all of Shining Path’s potential recruits, directing them toward creative, wealth-producing pursuits instead. 

Writing in the Wall Street Journal last week, De Soto urges policymakers to heed these lessons in the fight against ISIS: 

As the U.S. moves into a new theater of the war on terror, it will miss its best chance to beat back Islamic State and other radical groups in the Middle East if it doesn’t deploy a crucial but little-used weapon: an aggressive agenda for economic empowerment. Right now, all we hear about are airstrikes and military maneuvers—which is to be expected when facing down thugs bent on mayhem and destruction.

But if the goal is not only to degrade what President Barack Obama rightly calls Islamic State’s “network of death” but to make it impossible for radical leaders to recruit terrorists in the first place, the West must learn a simple lesson: Economic hope is the only way to win the battle for the constituencies on which terrorist groups feed.

Read the whole article here.

Leszek Balcerowicz

Last month marked the 25th anniversary of what has been described as the “Polish Miracle.” Six weeks before the fall of the Berlin wall, Leszek Balcerowicz, Poland’s new deputy prime minister and minister of finance, “outlined a plan to transform Poland’s economy from communism to capitalism,” reported Market Watch in September. “Prices would be decontrolled, individuals allowed to start businesses, the survival of state enterprises determined by the market [and] the printing press would be shut down — halting hyperinflation…”

Balcerowicz, whom Cato Senior Fellow James Dorn described as “the architect of Poland’s transition from Soviet-style central planning to a market economy,” was awarded the Milton Friedman Prize this year. The reforms he initiated lifted the Polish people out of the poverty and misery of Soviet-style economics. From 1992-2012, Poland’s economy more than doubled in size, growing at an annual average rate of 4.42 percent.

In August, former U.S. Senator Phil Gramm and Michael Solon wrote an op-ed in the Wall Street Journal comparing the experiences of post-Soviet Ukraine and Poland. Whereas Ukraine “largely squandered its economic potential with pervasive corruption, statist cronyism and government control,” and now faces a serious threat to its independence, “Poland created the prosperity that has strengthened and solidified its freedom and independence.” And “[t]he man largely responsible for Poland's transformation is Leszek Balcerowicz.”

Today, the Cato Institute hosted an event on “The Transition from Communism 25 Years after the Fall of the Berlin Wall,” in which scholars explored the uneven transition from communist dictatorship to democracy and market economics, drawing lessons about which reforms worked and which did not. Balcerowicz’s historic leadership of one of the most successful of those transitions is precisely what earned him the prestigious Milton Friedman Prize for Advancing Liberty. Listen to his acceptance speech here.