Wednesday, January 17, 2007

Economic Freedom Strongly Related to Good Economic Performance

This one comes from the "Duh" file, but it bears repeating often that the most free nations are the best economic performers. A free nation is defined as one in which its citizens have business (regulatory) freedom, fiscal freedom, trade freedom, and freedom from government interference, among other freedoms. The beneficiaries of the stellar economic performance are all citizens of those nations, across income levels.

To put it another way: capitalistic societies perform better economically, and result in a better life for the poorest living in them, than socialistic societies. The more government interferes in the economy and lives of its citizens, even when its intentions are good, the worse off people living under that government become.

Here's the most recent Index of Economic Freedom report. There's plenty of detailed data to back up the findings of the report, which, as I said, should be self-evident to any critical thinker.

Following is a snippet from the Executive Summary of the report:

Economic freedom is strongly related to good economic performance. The world's freest countries have twice the average per capita income of the second quintile of countries and over five times the average income of the fifth quintile of countries. The freest economies also have lower rates of unemployment and lower inflation. These relationships hold across each quintile, meaning that every quintile of less free econo-mies has worse average rates of inflation and unemployment than the preceding quintile has.

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