I am sitting in one of the freest nations in the world right now. I'm sipping my coffee in my office overlooking a beautiful swimming pool in a landscaped garden of flowers and palm trees. High rise buildings, subway stations, and corporate developments are going up everywhere around me because of the abundance of capital in the country. Porsches, Bentleys, Mercedes, and any other car brand that could possibly make you salivate zooms by on the road below. The buzz of activity is everywhere and loads of people are hurrying to lunch before heading back to work. The unemployment rate is 1.9%. Taxes are some of the lowest in the world. Anywhere from 0-20%
I am sitting in Singapore.
Thought I was going to say the United States, right? (Well, maybe you didn't think that given the picture at the top.)
The United States of America, once the freest nation the world had ever seen, tragically is not even in the top ten of free nations today.
In fact, the United States is the ONLY COUNTRY in the world that has recorded a LOSS of economic freedom for seven straight years. Seven. Straight. Years.
What is Economic Freedom?
According to economicfreedom.org, "economic freedom is the key to greater opportunity and an improved quality of life. It’s the freedom to choose how to produce, sell, and use your own resources, while respecting others’ rights to do the same."
While a simple concept, economic freedom is an engine that drives prosperity in the world and is the difference between why some societies thrive while others do not. Economicfreedom.org put out an awesome video explaining why everyone in the world wants to live in economically free countries. Including you.
"For much of human history, most individuals have lacked economic freedom and opportunity, condemning them to poverty and deprivation."(1)
Why was most of human history lacking economic freedom for most individuals?
Governments. Kings. Tsars. Royal families. Dictators. Any time you have a government who wants to control everything, wants its citizens (or subjects) to bow to them, wants to control the money, wants to overtax its people; you will find a nation with low standards of living and impoverished citizens. Any time government has freedom, the people have no freedom.
If you turn it around though, if you give the freedom to the people, then the government is restricted. The government has less freedom. But that scenario almost never happens because the government has violence backing them. They have the police, the military, and most importantly, the law. The law that they create that supports that what they are doing is "legal." How can people fight that?
Why should you care about Economic Freedom?
If you get anything from this article it needs to be this. You should care about economic freedom only because it affects every single part of your life. Living in a society with high levels of economic freedom leads to:
- being able to work the job that you want
- a higher standard of living
- more advanced health and medical
- improved well-being
- a higher quality of life
- a life beyond just 'survival' but of luxuries
- more opportunity to produce, sell, and buy whatever you want
- higher incomes
- lower poverty
- less unemployment
- longer life expectancies
- cleaner environments
- innovation and invention of great products
- cheaper prices for consumers due to economies of scale and technology advancements
Without the conditions that come from economic freedom, you're just 'surviving'
These are the most important factors of our lives. Here, in America, we have taken all the above benefits for granted. When these conditions exist, we have the freedom and the luxury to focus on ideas that are not just about survival. We can watch sports, enjoy films, run triathlons, shop for makeup, work in creative jobs like acting and graphic design, buy organic, plan a dinner party, renovate your kitchen and bathroom, and just about any other "first world" activity you can think of.
The more economic freedom a nation has, the more "first world" problems exist rather than real problems
We all know what "first world" problems are. Jokes are made frequently about it. Your heated car seats don't heat up fast enough. Your diamond wedding band is too tight. The blinking light of your Samsung Galaxy is keeping you awake. Your internet is going too slow. You don't have enough garages for all the cars you own and you have to park in the street. Your Prada heels are hurting your feet as you walk the red carpet. You've had to park your BMW sooo far from Whole Food's entrance. You get the picture.
Real problems are hunger, rape, cholera, homelessness, feeding your children, daily theft, etc...
Well, first world problems can only happen in countries that have economic freedom. So if you would prefer to have first world problems in your life rather than real problems, it's time to support policies and politicians that extend economic freedom, once again, to Americans.
How is economic freedom measured?
The Fraser Institute’s annual report, The Economic Freedom of the World Report analyzes five subcomponents to measure a country’s level of economic freedom. These subcomponents include the size of government based on expenditures and taxes; the legal structure and its protection of property rights; access to sound money; freedom to trade internationally; and regulation of credit, labor, and business.
The Heritage Foundation, in partnership with the Wall Street Journal, publishes the Index of Economic Freedom. It evaluates various subcomponents of economic freedom, including levels of business, trade, fiscal, monetary, and labor freedom; government spending; and property rights. They measure economic freedom based on 10 quantitative and qualitative factors, grouped into four broad categories, or pillars, of economic freedom:
- Rule of Law (property rights, freedom from corruption);
- Limited Government (fiscal freedom, government spending);
- Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and
- Open Markets (trade freedom, investment freedom, financial freedom).
The Conclusion on having economic freedom in your country.
Since the Fraser Institute's first publication in 1996, "numerous studies have used the data published in Economic Freedom of the World to examine the impact of economic freedom on investment, economic growth, income levels, and poverty rates. Virtually without exception, these studies have found that countries with institutions and policies more consistent with economic freedom have higher investment rates, more rapid economic growth, higher income levels, and a more rapid reduction in poverty rates."(2)
Heritage.org states that "Economic freedom brings greater prosperity. The Index of Economic Freedom documents the positive relationship between economic freedom and a variety of positive social and economic goals. The ideals of economic freedom are strongly associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination." (3)
America's government has too much freedom and its citizens too few.
Our standard of living is going down and loss of economic freedom is one of the biggest reasons why. The solution for us Americans is to take back our freedoms. This is hard because once the State (the government) gets their hands on more freedom and power, the harder it is to wrench it away from them. They become addicted to the money, power and influence and they will fight like hell to keep it.
I will tell you that government's social programs, promises that the government makes to you to get your votes, will not bring about economic freedom. Demanding that the government "do something" every time something bad happens is the wrong way to approach our problems. Allowing for prices controls (like minimum wage) damages the free economy and hurts the poor even more.
We need representatives who aren't hungry for power. That's a tall order, I know. But there are a few who exist. Presidential candidate, Rand Paul, is one of them. Please recognize that if your representatives want big government programs, big government spending, big government power (even if they are saying "it's all for YOU. For YOUR protection. For YOUR security) they are not for economic freedom for you. They are for putting you in chains and giving themselves the freedom.
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