Roger Clites is Associate Professor of Business at Clarke College, Dubuque, Iowa.
We are often reminded by the news media of the value placed on political freedom by those who challenge overwhelming odds to escape from iron curtain nations, be they in eastern Europe, Asia, the Caribbean, Central America or elsewhere. Occasionally slight mention is also made of a desire for economic freedom. However, the emphasis nearly always is on escape from political repression. (In fact, our federal government policies concerning refugees allow that status only on the basis of political repression, not on the basis of economic repression.) My purpose here is to recount the importance of the relative economic freedom of the United States to two citizens who spent their early years in other economies.
Herman was a university student I had in several classes between 1956 and 1959. A few years earlier he had won a competition among 1300 students about to graduate from the gymnasium level of German education. The prize was a year of college study in the United States. Based on his observations of the relatively greater amount of economic freedom in the United States, Herman resolved to return to America and to become a citizen. At that time the quickest way for Herman to secure United States citizenship was to enlist for a period of servitude in the U.S. military; so he joined the navy.
I first met Herman when he was working in a camera store and attending my night class in “Principles of Economics.” Early in that course he taught all of us something I’ve cherished ever since. I had been listing and discussing with the class various reasons why the U.S. economy out-performed that of other nations. We discussed such matters as abundant natural resources, geographic removal from the destruction of most major wars, settlement of the country by ambitious and able immigrants and other factors. Herman then pointed out that we were overlooking the most important of all considerations. He called that matter, “non-policies of government.” He went on to explain what he meant by giving several examples, both of government policies and of traditions and attitudes that complemented those policies, which fostered and perpetuated economic waste in his homeland.
The Academic Route
Herman rapidly took advantage of the relative economic freedom he found in the United States. A year following our first meeting he was still working to support himself but was-now attending the university full-time so as to ready himself to enter a higher level of the work force as soon as possible. When Herman graduated the next year, he had been voted two honors. The faculty selected him as the student who had contributed the most to the school of business during his student years. Remember, he did this while working his way through the university. Meanwhile, his fellow students selected him as “most likely to succeed.” Herman was a talented person, pursuing an “intellectual” path to economic improvement.
The other person I have in mind was more a “common man,” though uncommon in many ways. He called himself “Pete,” since most people in this country could not or would not learn his real name. He migrated to the United States from Greece in 1957 at age 18 with no knowledge of English and little more than a dream. Pete started working at the commonest of common labor while learning the language. After a time he became manager of a soft ice cream store.
When Pete was 23 years old he decided he wanted to marry Anne, one of his customers, who was about to graduate from college. Anne’s father might well have objected to the marriage on religious grounds. She was Southern Baptist and Pete was of nominal Orthodox persuasion. However, her father took an economic approach. He pointed out to Pete that his thriving automobile dealership had made it possible for him to provide well materially for Anne and questioned whether she would long be happy with Pete’s earnings.
As usual, Pete saw this as one more temporary obstacle to be overcome. He consulted with some of his friends in the local Greek community who happened to be in the restaurant business. They told him they had learned that they could cut their costs of produce more than half by buying directly from nearby farmers. So, Pete decided that he could buy directly from the farmers, who were in the Carolina Piedmont region, and successfully compete with the large wholesalers who sold to stores and restaurants in the mountain area 100 to 150 miles to the northwest. He challenged Anne’s father to help him finance a used pickup truck with the claim that within six months he could be earning more than the father earned from his auto dealership. The truck purchase was arranged.
Pete made good his prophecy. The large wholesalers had the expense of storage warehouses, sales commissions, management salaries, truck drivers’ wages and, most of all, spoilage costs of up to one-third of their produce. Pete, however, was management, salesman and truck driver combined. His glove compartment was his office. Every day he worked until the large “dog house” he had built to protect and contain goods on the rear of his truck was sold out, so he had virtually no loss due to spoilage. He charged at least 20 per cent lower prices than the big wholesalers, so he had no trouble selling his merchandise.
I met Pete in 1965 when he was 25 years old. He and Anne lived in an apartment house I managed and Anne was in two of my classes studying toward her MA degree. Pete normally worked three days a week for about 14 to 16 hours, each. He would make $200 to $300 per day. (Remember, this was 1965 when prices were roughly one-third what they are today.) Pete once worked six consecutive days to see how much he could earn in a week. It came out about $2000, he claimed. Even if he exaggerated, he must have done quite well. I used to tell him he would either be a millionaire or dead by his 40th birthday. He claimed his primary goal was to make it possible for Anne to earn her PhD from Harvard.
I was next in touch with Pete in 1969. He was in Boston collecting substantial royalties from a route of coffee vending machines he had established. Anne was home with their little girl, but was planning to begin work on her doctorate before long.
When our paths next crossed in 1980, Pete was almost 40 years old. Anne had her doctorate, not from Harvard, but from another university in the Boston area. She was head of her department at a community college in Boston. Pete still collected royalties on his ever-expanding coffee machine routes and owned upwards of a dozen store buildings plus other real estate. He, Anne and their two children spend each Christmas vacation in either Florida or the Caribbean. Every other summer they visit his family in Greece for an extended period.
These two entirely different men came to the United States from greatly divergent backgrounds, saw the opportunities available in this land of relative economic freedom and put into action their appreciation of the opportunities available to them. Herman took the approach of education and, eventually, the corporate world. Pete, who arrived without either skill or knowledge of the language, decided to learn the language and put to work whatever talents and abilities he could find within himself. He was able to see what was needed or wanted, wherever he located, and set out to provide it at a price that would be competitive and yield him a good income.
Why is it that these men who were not accustomed to our relative economic freedom could profit so much more from it than can most who have grown up surrounded by it? Perhaps it is because they appreciated it, whereas we take it for granted.