There is one stinging criticism sometimes attributed to the free market that rises above all others. It’s the supposition that all rich people desire greater liberty to make themselves richer at the expense of the poor. If this claim were strongly supported by the results of the free market, then it would be much harder to make the case for economic freedom. But when you crunch the numbers and compare the economies of different countries, it’s clear that economic freedom benefits people in far more ways than increasing incomes.
For nearly two decades, The Fraser Institute and The Heritage Foundation have each conducted analyses of almost every country in the world, evaluating their institutional structures and rules according to how much they allow or constrain economic freedom in trade, labor, business, and banking. The results of their studies demonstrate that greater economic freedom benefits everyone in society. Free markets don’t promise us an inevitable evolution into utopian perfection, but they do facilitate real progress. Economic freedom tends to correlate with positive results in various areas of life. The monetary benefits that it provides include quicker economic growth, a greater proportional share of income by the poorest 10%, and a tremendously higher average income of the lowest 10%. An open market also translates into better health care, greater protection of civil rights, more satisfaction in life, higher literacy rates, lower infant mortality rates, better education for children, and a cleaner environment. Higher economic freedom is even correlated with higher overall social progress as measured by The Social Progress Imperative’s analysis of the availability of basic human needs, foundations of well-being, and opportunity. Heritage has demonstrated the correlation by comparing its Index of Economic Freedom to the Social Progress Index.
I’m not arguing that free markets will always facilitate the ideal human life. What the evidence does establish, though, is that the freer a country’s economy, the more likely it is that all individuals benefit. We don’t have the luxury of living in a world of pure thought like Karl Marx, where we can dream of a future day when everyone will bathe in gold regardless of particular circumstances. Fortunately, the free market offers us a realistic solution to just about every issue that endangers the different aspects of our well-being.
There are plenty of philosophical arguments for why the free market is the best choice for all people, but if you are concerned with what empirical evidence has to say about what kind of economy works for everyone more often than not, then consider the free market’s results as you pursue the answer.
What do you think? Let me know in the comments!