As news headlines constantly remind us that not all societies flourish, the economic success of a nation often seems like a product of chance. Some societies prosper, while others remain stagnant and poor.Constantly, we hear of new ideas to improve the economy. Should we promote a change in the money supply, should certain industries receive subsidies, and will regulations help control what is created? We often think that the economy can be manipulated and adjusted. However, the American people often overlook the source of our prosperity: freedom. The moral and philosophical foundation of a society plays a great role in a nation’s success, and a people who are devoted to maintaining freedom economically, individually, and politically will create wealth beyond material goods.
When a society is dedicated to freedom on the economic level, they create a market system that is founded on minimal governmental interference. Such an economic system encourages a free exchange of goods and ideas while protecting individual rights of property. Freedom in economics minimizes guidelines that hinder businesses by directing their actions or dictating price;rather,the guiding force of supply and demand is allowed to naturally select the price of products. This unencumbered system also allows for open competition, which is one of the self-correcting aspects of a free market system. Where prices are established naturally, competition thrives in order to win the next purchase of the consumer. Competition makes up for the consumer’s lack of knowledge by putting natural pressure on companies to outdo each other. Competition drives down price and increases quality of products, but customers are not the only ones who benefit. Competition forces companies to improve, innovate, and distinguish themselves from competitors, leading to growth which allows a business to provide a greater return for their shareholders.Without opposition, individual businesses might allow themselves to become complacent with poor quality and inefficiency. Free markets, therefore, produce the best prices and best products by providing the structure in which prosperity is best fostered, one without complex regulatory interference.
Having a free environment in which business can prosper is powerful when coupled with individuals who are ingrained with a love of liberty. Free societies nurture individuals who are ambitious for personal gain. This is fostered by the understanding that a man is entitled to the fruits of his own labors. Individuals in prosperous nations generally have a sacred respect of natural rights, which includes the right to property. When respect for property and the desire to improve one’s situation is universal, individual actors are willing to take risks and attempt to improve their situation because the product of their efforts will be protected for them. Ambition is a byproduct of the belief that individuals have equality of opportunity to acquire wealth.In a freedom loving nation, merit determines status (rather than birth, such as in an aristocracy). Where men are not confined to a class at birth, they are encouraged to make the most of themselves to gain the station they desire. Merit is often assessed by wealth in such societies and this view further incentivizes men to be personally prosperous. As personal prosperity is stimulated,so too is the prosperity of the whole society increased as the individuals are free to spend their money. Conversely, societies with socialistic models that call for redistribution of wealth, such personal achievement is discouraged as individual risk cannot be rewarded as readily when individuals do not accept the principles of individual natural rights.
Additionally, a society’s dedication to freedom creates a political atmosphere in which a country can economically flourish. Governments built on principles of liberty and dedicated to protecting true individual rights will inevitably result in a safe and reliable regime. These types of regimes, most often in the form of a republic, cultivate peace, a fair dispensation of justice, and prudent regulations. These three characteristics of a free government are highly conducive to national prosperity. Peace creates a stable environment for businesses and consumers to exchange and allows people to enjoy the fruits of their labors rather than be subjected to constant fear for their property. Despite the increase in demand that war causes for certain industries, peace is necessary to a healthy, well-rounded economy. A secure and uncorrupt justice system is additionally beneficial because it allows for the honest and authoritative enforcement of contracts that underlie all business transactions. Intellectual property as well as material can be safely and reliably protected through patents in a well-adjudicated nation.In conjunction with peace and a fair justice system, simple and practical legislation, although not always completed in practice, would be the outcome of a completely liberty-loving political society. Such regulation would protect personal property while still allowing for free economic principles to guide markets creating a safe and stable environment in which individuals could invest,start their own businesses, and pursue individual interests.
While the recipe for economic prosperity is debated much in the world, history has shown that economic prosperity follows principles of freedom, for freedom is a product of accepting natural rights. Any society that wishes to flourish must have a strong moral foundation in which it secures these rights and promotes liberty to exercise them. Societies that try to control their prosperity by establishing economic plans or imposing harsh regulations generally restrict the opportunities available for growth and improvement rather than creating an affluent society. Doctors of economics James D. Gwartney and Robert A. Lawson, described it best when they wrote “Nations prosper when they provide a climate that encourages their citizens, often in cooperation with foreigners, to discover and adopt better ways of doing things.” The best way in which to promote such acts is to not hinder individuals in their pursuits and to protect their natural rights to life, property, and freedom. Where freedom is, prosperity follows.