This post was authored by Chris Snook
We as a nation have seen a surge in opinions that derail capitalism and free market economics as incompatible with the American Dream. From Barack Obama, to Bernie Sanders, Hillary Clinton and even President Donald Trump (in regard to international trade), the most popular candidates of recent memory all share staunch anti-free market rhetoric, some more explicit than others. This comes at a time when the U.S.’s economic competitiveness continues to fall (as it becomes less market oriented), with the most recent Heritage Foundation Index of Economic Freedom pegging the U.S. to it’s lowest point in the history of their rankings, 17th. We “boast” a score of “87.1” which, while qualifies as “mostly free” in their criteria – but why isn’t it the land of the free scoring a 90 like Switzerland, Hong King, Singapore, Lichtenstein, and Macao are?
A score of “87.1” isn’t exactly something you can visualize, so to give some context a welfare state like Denmark received an 87, as did Sweden. Both countries are touted by progressives as examples of how to organize economies. Countries often cited as having more socialized economies like Canada, the Netherlands and the U.K all rank above the U.S. in terms of economic freedom. It should be noted that only 9 years ago (the year before President Obama took office) the U.S was ranked 5th in the world in terms of economic freedom. In a similar study by the CATO Institute, the U.S ranked 11th last year, falling from a high point of 2nd, in the year 2000.
What does this all mean for people in the U.S? If liberal markets are not to blame for society’s perceived ills, then what is? The same problems people (especially young people) experience in the U.S are commonly felt throughout much of Western Europe; low paying jobs-relative to their education level, high youth unemployment and prevalence of temporary/contracted employment. To give an idea to how severe this issue is in Europe, The NY Times, a newspaper hardly known for being critical of Europe and their generous governments, published an article cataloguing the problems facing the youth there despite their safety net (or in their case, a safety hammock).
Should the U.S. continue down this path of increased control, socialization, and of our economy then too? It is rather obvious that those policies fail to achieve their desired result, as the nations that Heritage’s index ranks as the most economically free are also the most prosperous. If big government liberalism worked, we wouldn’t have seen Republicans take back control the House, Senate and most state governments today is that ordinary people are pushing back against a trend that has largely been pursued by the Democratic Party, that of widespread economic regulation, higher taxes, and redistribution.
Capitalism’s Founding Father Adam Smith once eloquently stated that “In general, if any branch of trade, or any division of labour, be advantageous to the public, the freer and more general the competition, it will always be the more so.”
If people want to purchase a good or use a service, there is no logical reason to make it more difficult to engage in that voluntary exchange. Any prohibition to mutually agreed upon transactions, only serves to hurt those involved, and the proof is easy to see. If our government makes it harder to fire employees or mandates a wage floor for them, the result is less employed people. The harder it is for a business to operate, the less businesses there will exist, and those that do will have less competition which will not be to the benefit of the American consumer.
Businesses come and go, grow and shrink. It is the natural order of an economy to be both chaotic and dynamic, but this is generally a good thing. No rational person would think that it is a just policy to regulate the resources within a forest solely because some animals will always be suffering from less food relative to the rest of the ecosystem? We accept that nature can regulate itself efficiently without some governing body issuing orders, but someone that is different in terms of how we as humans use resources?
The only way forward is to unapologetically advocate for and defend the free market. It is not a desire for greed and money that drives my or anyone else’s desire for unfettered markets. It is a desire to allow people the opportunity to pursue a life better than the one they were born into. You cannot have social mobility if you make it difficult for people to peruse their own desires freely. A free society must have free markets to truly be free.
Heritage 2008 Index of Economic Freedom
Heritage 2017 Index of Economic Freedom