- The importance of economic freedom
If we look at the economic system in countries around the world where millions of people have risen out of poverty, the ingredient we see over and over again is a high level of economic freedom. Historically, Britain and the United States are shining examples of this building block in action. More recently, governments in India and China have freed their people to make their own economic decisions and as a result, people in these countries now work for a better life for themselves and their children.
This is why the most recent Economic Freedom of the World report should be of great concern to people in the United States. Between 1980 and 2000, the U.S. ranked number three in economic freedom behind Singapore and Hong Kong. In 2010, our country has dropped to 18th spot. As history shows, all great empires eventually decline and fall.
Is the U.S. now on the same path as the Roman and British Empires?
Economic Freedom of the World measures degrees of economic freedom in five areas: size of government, property rights, sound money, international trade and regulation. Between 1980 and 2000, the U.S. was the third freest country in the world and achieved a higher freedom score every year. In 2000, the U.S. became the second freest country in the world, after Hong Kong. Then, the steady march to greater freedom ended. Between 2000 and 2010, the freedom measure actually dropped. Because other countries such as Canada, Australia and Taiwan continue to improve, the U.S. fell dramatically relative to other countries and now ranks 18th overall.
Why is economic freedom important?
The report shows that countries ranking high in economic freedom have a higher average per-capita GDP, less poverty, higher life expectancy, and more political and civil liberties.
On the positive side, the U.S. is still well ahead of Myanmar and Zimbabwe but could soon be surpassed by Kuwait (number 19 on the list) if our government continues to raise taxes, inhibit free trade, overwhelm the private sector with regulations and debase the value of the dollar.
Can we turn this around?
Margaret Thatcher did end the Britain’s ‘inevitable decline’ but only temporarily. The drive to return to more freedom rather than less must come from the bottom up, not the top down. We will continue down this road unless more people rediscover the value of freedom and demand an uncompromising return to this value.
Let’s face it; decline is non partisan. It started under a Republican president and continues today under a Democratic president. It’s up to voters to demand less government, not more, if we want to again be that shining light on the hill.