An Honor Deserved, A Champion of Freedom Mourned
Peter Bauer Dies at 86
JULY 01, 2002 by SHELDON RICHMAN
With great sadness we at FEE received the news that Peter Bauer, 86, had died on May 2. Perhaps we took it harder because we were still rejoicing over his winning the Cato Institute’s first Milton Friedman Prize for Advancing Liberty. So many meaningless awards are given out; it was a pleasure to see a significant honor bestowed on a worthy recipient. No one deserved it more. (See James Dorn, “P.T. Bauer’s Market-Liberal Vision,” Ideas on Liberty, October 2000.)
Part of the emotional appeal of the freedom philosophy lies in the image of the courageous individualist who stands alone against the multitude to struggle for what he believes is right. That describes Peter Bauer. Beginning after World War II, he stood against the economics establishment and insisted that the undeveloped world needed free markets and private property. That may not sound terribly radical in 2002, but in 1946 and for decades afterwards, to favor laissez faire for the poor was to risk professional ostracism. Those were years when nearly everyone believed that countries could develop only with Soviet-style central planning. Peter Bauer would have none of it. Through empirical studies in West Africa and Malaysia and impeccable economic reasoning, he showed that free-market principles are universal.
The development establishment had a thousand reasons why markets wouldn’t work in Africa, Asia, and Latin America. The likes of Gunnar Myrdal and John Kenneth Galbraith “knew” that poor people don’t respond to market incentives, that they can’t afford to save and invest, and that only foreign aid can offer hope. To which, Peter Bauer replied: how, then, did the West get rich? After all, poverty is the natural state and there was no one to ask for foreign aid.
Through books and articles (his last is From Subsistence to Exchange and Other Essays) Bauer patiently showed that markets work and that government-to-government transfers only fatten the intrusive political class. Among the myths he shattered are the beliefs that the undeveloped world is overpopulated and that the West caused its poverty.
Bauer’s work, in contrast to the condescension of the mainstream development economists, brims with respect for the people of the developing countries. Such is the result of his embrace of the universal values embodied in the freedom philosophy.
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