The Doug Noll Show

My guest today is Jay Lillie, international lawyer, author and speaker. Jay caught my attention with his ideas about developing freedom in oppressed countries through business. His thesis was that business creates freedom, not politics. Then Jay sent me a copy of his second novel Pacific Rebound, which I thoroughly enjoyed. Jay practiced with a large Wall Street law firm for many years as an international lawyer. He represented American companies in eastern and central Europe, Australia, New Zealand, and Asia. Over the years, Jay developed some ideas about business and freedom.Jay tell us how he represented an American pharmaceutical company in negotiations with the governments of Hungary and Czechoslovakia when those nations were still under the Russian thumb. He spent time behind the Iron Curtain, and got to know some very talented people well enough to see how much they envied the freedom hisclients had. In addition, he found time to take up writing. His first novel, Havana Passage Later, came about when he looked at Cuba and realized it was American law that was keeping us from doing the same there, Jay wrote essays and articles drawing the comparison to the fall of the Berlin Wall. It fell on deaf ears, so he put it in novel form – at least that was fun. That’s Havana Passage – Washington, Havana, and Miami, rather than Washington, Moscow, and Prague.

Jay has started businesses in Japan for U.S. clients and done years of work in Australia, New Zealand and Southeast Asia. He tell us that there’s not much better evidence for the notion that free markets breed individual freedom than in this area of the world. We talk about China as an emerging business nation. Jay observes that the Chinese have been very astute business people for hundreds, if not thousands of years. China will take its time if the people let it. It won’t happen overnight there as it did in Japan and Southeast Asia. The Chinese are born business oriented, but they have some very basic infrastructure to put in place over a vast population and geographical expanse.

One major constraint on freedom is poverty. The response to poverty varies from country to country. Populism is a common response, as shown by Hugo Chavez in Venezuela. Populism is the free market’s greatest enemy. Eventually, Populism decays into and an East Germany, or a Cuba, and the slide is already happening in Venezuela. Free markets will pull us out eventually if we concentrate less on giving things away and more on elementary and high school education. China, Korea, and other Asian cultures are way ahead of us in preparing the young for a successful future. If you want the details of how we’re losing the competition from fifth grade on, read Alan Greenspan’s new book, or walk across the campus at Caltech and MIT.

Jay and I talk about Cuba. A secret poll was taken in Cuba several years ago and somehow secreted out to New York. It asked ordinary Cubans to rank from a list what they wanted most in life. It included all the things you can imagine, like the right to vote, freedom of religion, freedom to travel, etc. By far the first choice among these people, who haven’t had a glimpse of liberty in 50 years, was being able to choose what they do to make a living. The awakening can be any form of business which an oppressed people experience first hand, but it’s they’re own small business effort that builds the infrastructure, and it’s impossible without freedom of choice. Tourism is probably the exception for businesses that help foment local industry in police states. There’s plenty of that in Cuba, but what they need are engineers, builders, inventors, accountants and entrepreneurs, on the ground in their community and providing a local template for success. (They already have plenty of lawyers.)