Even most critics admit the free market is the greatest wealth-generating system in history, but they say the poor benefit more from interventionist economic systems. In fact, economic liberty elevates the least well-off in more laissez-faire nations to a better position than those living in unfree economies based on such factors as average income, life expectancy, literacy, and other forms of personal liberty.
The data bearing out each point are contained in the Fraser Institute’s most recent “Economic Freedom of the World” report, which I wrote about last week.
“The link between economic freedom for all citizens and the prosperity they enjoy is undeniable,” said Fred McMahon, a resident fellow at the Fraser Institute.
Specifically, the report found:
These benefits do not account for the benefits revealed by surveys from Freedom House and the Pew Research Center showing that economically free societies enjoy a higher level of political freedom and religious liberty than statist economies.
These six figures show that all those living in proximity to wealth enjoy its benefits. The more wealth generated by free economies, which rely more on individuals acting upon their personal moral code than government direction, the more every member of society benefits.
U.S. Congress heard about the importance of stimulating economic growth and removing barriers to innovation from Michael Strain, director of economic policy studies at the American Enterprise Institute (AEI), in May.
“Increasing the growth rates of the labor force and capital investment are extremely important, as is improving the skills of the workforce,” he toldthe U.S. Senate Committee on the Budget. He concluded:
Over long periods of time, nothing is more important to economic growth than innovation, than letting loose the creative power of individuals. New ideas, new inventions, new technologies – new things that rose along with a new culture around work, equality, and dignity – are what created the world we live in today. They took, and are taking, billions from poverty to wealth, from illness to health, from short to long lives, from ignorance to educated. Government should have in mind the importance of sustaining a culture that allows for creativity and energy. Public policy should not stifle human potential, the growth that comes with it, and the betterment that it creates.
The following video illustrates many of the benefits of economic freedom for the poorest people: