‘The Land of the Free’ is no more. This statement should no longer even be associated with America. It has come into light, the ‘Land of Opportunity’ has sunk yet another level in its economic freedom index: the ‘Great American Nanny State’ is 20th in the Overall Freedom Ranking.
In 15 years the U.S. has slid down the economic freedom ranks by 15 places by the Fraser Institute. In 2000, it was in second place to Hong Kong, which still happens to be first. The reasons for this are countless: a severe onslaught on the individual’s purchasing power, unrestrained regulation across the private sector and rising taxes to name but a few.
Once the beacon of economic liberty, America has now fallen behind many European nations including the U.K., Ireland and Switzerland. To still consider the United States Kings of capitalism and liberty is to deny reality. The U.S. is now the beacon of large-scale regulation and crony-capitalism. It is crippling the country in its tracks through excessive money printing. With no auditing of the Federal Reserve (just like the European Union) a layer of permanent inflation has developed – on top of the citizen’s rising taxes to fund colossal Government quangos.
Why does economic freedom matter? Are people in a liberty high country happier or more successful?
The Fraser Institute report describes a strong correlation between economic freedom and a number of socially desirable outcomes. Economically freest countries average a life expectancy of 80 while the least on the other side expectancy is around 63. Overall GDP per capita also improves in economically free countries with an average of $38,601 compared to $6,986 in its more authoritarian counterparts.
However, both the Democrats and Republicans seem to not care, ignore or just don’t understand the clear advantages a free economy offers. Both parties express a wish to expand Government and interject in every part of a U.S. citizen’s life. The social mobility within the U.S. and U.K. have slumped massively over the past decade. Compare this to the free land in 1787 where capitalism caused standards of living to explode – much like ours did during the Industrial Revolution.
Nearly all western countries have been on a slope of decline towards social democracy and socialism for the last few decades. Why? What are the benefits? The best countries to explore these questions are the Scandinavian countries. The third ‘World Happiness Report’ was released earlier this year and it outlined some interesting points.
The top 5 happiest countries included Switzerland, Iceland, Denmark, Norway and Canada. Four of the five countries in this list are part of Scandinavia and only one scores high in the economically freedom league – Canada.
Denmark then, for a moment: Renowned for having the highest taxes, the country offers a comfy social safety net, free childcare and long term unemployment benefits. With massive taxes coupled with large benefits it negates the rich and the poor. As desirable as this sounds there are a few negative consequences to this way of life.
Its productivity is in decline, as most workers are part time. Most jobs are public sector, so no real wealth is truly gained. Despite things being labelled as free, an average income tax of 57% demonstrates a steep price. Denmark has the highest private debt in Europe and it is beginning to realise its economics is unsustainable, the IMF has said a number of times. Health care is free but the waiting times are at a record high. Since 2014, Denmark’s equality is beginning to decrease, with the amount of the population under the poverty line doubling, throw in an ageing population as well, it is clear Denmark has become the land of the unsustainable.
Unfortunately, what you see with countries of high taxation and large state spending is a lack of responsibility and ownership. Citizens never own anything outright – taxes are too high so the state supplies everything. There is also a problem with a sense of purpose, with everything offered on a plate, people do not need to work, boredom surfaces and social problems begin. However, the most notable trait missing from these countries is innovation. There is very little excitement and they have never been at the forefront of anything.
It is important to note, economic freedom on its own does not mean happiness. It requires freedom across the board i.e. individual happiness and real wealth for all citizens is achieved when a society is economically, socially and politically free. As of yet, there are no examples of this existing in today’s world.