“Politics is the business of getting power and privilege without possessing merit.” — P.J. O’Rourke
The historian John Steele Gordon observes that the United States is the most influential country in history and that the reason is our economy. In his book, An Empire of Wealth, he declares that ours is “an empire of economic success and of the ideas and practices that fostered that success.”
Gordon describes the rise of the American economy as an “epic powered by uncountable millions [of people] pursuing their self-interests within the rule of law, which is the essence of liberty.”
Liberty has been a hallmark of our country for most of 400 years. Many of the early settlers came for religious freedom. Others “came to pursue their own ideas of happiness … with less interference than anywhere else.” The voyage was perilous; the New World sometimes more so. Many died at sea; many others died within a few years. But they took those risks for the sake of liberty.
In our Declaration of Independence the signers pledged their lives, their fortunes, and their sacred honor to support the idea that all men had the unalienable right to “Life, Liberty, and the pursuit of Happiness.” Eleven years later, some of those same men signed the Constitution to “secure the blessings of Liberty”.
A century later French sculptor Frederic Bartholdi created the Statue of Liberty as a gift to the United States from the people of France. Do you know that a similar, though much smaller, Statue of Freedom tops the U.S. Capitol Dome?
The point of all this history is that Liberty, as a word and as an idea, has been the heart and soul of our country from the beginning. (Homework: on what U.S. coin is the word “Liberty”?)
Albert Einstein declared that “Everything that is really great and inspiring is created by the individual who can labor in freedom.” Most of the world’s great technology was created in the United States. And with just 6% of the world’s population, the U.S. has won 42% of the Noble Prizes.
We became the greatest country on earth because ordinary people had the freedom to do extraordinary things. People such as Thomas Edison, Henry Ford, and Steve Jobs started from humble beginnings and created whole new industries.
Some may say that our success was an accident of our geography and our natural resources. But how then do they explain the economic success of Hong Kong? It is but a small island with zero resources. Yet its per capita income is among the highest in the world. Not coincidentally it is ranked highest in the world for economic freedom.
No. Prosperity is not a result of natural resources – or perhaps it is. The most valuable resource for any country is the human mind. And the United States “unleashed the energy and individual genius of man to a greater extent than has ever been done before. Freedom and the dignity of the individual have been more available and assured here than in any other place on Earth.”
Every year, think tanks around the world rank the various countries for their economic freedom, personal freedom, political freedom, etc. One such ranking is the Index of Economic Freedom. It measures ten components of economic freedom such as freedom from corruption, fiscal freedom, labor freedom, and trade freedom. After averaging the ten component scores to produce an overall score from 0 to 100, it groups the countries as Free, Mostly Free, down to Repressed.
Years of study have shown that more economic freedom corresponds to higher per capita income, stronger growth, less poverty, and a cleaner environment. Other studies have shown that freedom also corresponds to more happiness and longer life spans.
Prior to the fall of the Berlin Wall more than 20 years ago, Germany was two distinct countries: West Germany and East Germany. One was free and prosperous; the other suffered tyranny and poverty. When East Germany was freed from the tyranny of Communism and became part of a free united Germany, it quickly became prosperous.
Today, we can look at the very prosperous South Korea, which is “moderately free” and the literally starving North Korea, which is “repressed”. Some may think of China as being a great country but it is ranked “mostly unfree”. Its per capita income is only one-quarter of Taiwan’s, ranked “mostly free”.
So, where does the United States rank in the index? Our overall score has dropped to just 76, #10 in the world. We aren’t even the most free in North America; Canada has taken that spot. Five years ago we were rated “Free”, now just “Mostly Free”. The U.S. is one of only three countries in the world that have dropped for five straight years, a total loss of more than 5 points.
Predictably, we have less prosperity – the rich have gotten richer, the middle class poorer – we have low growth and more people on the edge of poverty. For the first time in history the U.S. has dropped out of the top 10 on the Legatum Institute’s prosperity index.
The only good news is that people realize that we are headed in the wrong direction. By more than 2:1 margins, polls show that we are on the wrong track. The cure is to restore the economic freedom that made us the greatest country on earth.