Economic Freedom Matters
by Tom Donelson on January 23, 2011 at 11:29 AM
The Heritage Foundation reminds us that economic freedom matters not just in promoting prosperity, but in promoting political freedom. Look at those nations who are either free or mostly free economically and you will see nations who are politically free as well as are among the world's most prosperous nations.
The lesson that this survey shows is economic freedom= economic prosperity. Most interesting is that if we review the top ten nations; seven of them have a connection to Great Britain as former colonies. While much has been made of the rise of China, what is often overlooked is that those nations associated with the Anglosphere including Canada, Australia, New Zealand as well as United States are not just among the world's freest economies, but among the world's most prosperous.
Now for the bad news, this past year, the United States continued its decline to number nine among freest economies. Here are the facts, the United States is still the largest economy, and is the world's largest producer of manufactured goods. United States federalism has allowed diverse economic policies and strategies, but over the past two years, the federal government has expanded ever faster and the gross public debt is approaching a hundred percent of GDP including the Federal takeover of health care, our banking system and General Motors can easily be accurately described as Government Motors. Canada is now more economic freer than the United States and so far has experienced less unemployment than the United States during the recent economic downturn. Canada has a strong manufacturing base as well as high technology sectors to go with abundant supply of natural resources.
Great Britain has fallen even further behind when it comes to economic freedom. In the 80’s, the Thatcher reforms allowed Britain to outpace much of Europe throughout the 1980’s and 1990’s but since 1997, the Labour Party damaged the British competitiveness with increase spending and increased government size. Just as the Obamanomics is slowing America’s competitive advantage, the British have experienced severe decline in their economic performance.
The combined economic output of Great Britain, New Zealand, Australia, Canada and the United States measures nearly 20 trillion dollars, which makes the Anglosphere nations the most prosperous group and while many are predicting a China dominated century, the Anglosphere still have advantages that could propel the 21st into the Anglosphere century.
China has begun its own transformation but it is still has a way to go. The Communist Party allowed economic markets to exist due to necessity but the Party still maintains ultimate authority over economic decisions. The financial sector, controlled by the government, allocates as much on political criteria as economic efficiency and productivity. There is much more fundamental restructuring left to accomplish.
China industrial and manufacturing is second to the United States but the per capita wealth is still far behind the United States while the Party maintains tight control over all political freedoms including expression, speech, and religion. China is struggling with the migration of many from rural areas seeking economic opportunities to the wealthier urban areas.
China is still a developing nation and has much to learn about how to maintain its present economic trajectory, and while its growth has been impressive, the idea that we work for China is not simply overwrought but wrong. China is not our equal at this point in history.
China will overtake the United States only if the United States allows it to. Economic decline is a choice decided by economic policies instituted by the government. There is no doubt that Obama and the Democratic Party's long term economic program will lead to decline but reversal of those policies will lead to America's revival.