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The Strongest and Most Dynamic Economy in World History

My administration will protect the rights of the people for the strongest and most dynamic economy in world history.

The key ingredient to economic and cultural prosperity is liberty. This is shown every day in world history. Freer nations have larger economies. Despotic nations have smaller economies. We can see this everyday of human history.

Because every day in every nation is an example of this, we’ll have to pick a few to examine more closely.

Let’s first look at 165 nations ranked by freedom. The Cato Institute produces a ranking of world nations called the Human Freedom Index. This table of 165 nations, ranked by various measures of freedom (personal, economic, and human) shows a direct link between freedom and strength of economy. Take a look at the top of the table on pdf page 5. There you find the freest nations on earth. With few exceptions, these are also the wealthiest nations on earth. This isn’t just a coincidence. Liberty is essential for economic and cultural growth.

What about China? China ranks 152 on the Human Freedom Index, but their economy has surpassed ours by several key measures. China doesn’t break the rule that liberty is essential for economic and cultural growth. Rather it shows us that just barely enough liberty, in the right places, can make or break an economy. China’s recent history shows us how this works.

In the late 1950’s and 1960’s, China increased state control of their already socialist economy, with disastrous results. Estimates of the deaths from famine and political purges range from 15 to 55 million. An extreme example of militant and cultural dictatorship, the poor decision making ability of the Chinese government, coupled with their authoritarian grip on power led to extreme suffering and death. That is to be expected.

In the late 1970’s, Chinese government officials began allowing people and businesses small, localized increases in economic liberty as tests. As the increased economic liberty resulted in economic growth, the local changes were adopted nationwide. Market forces increasingly fueled the Chinese economy, and steady growth resulted.

As small increases in economic liberty proved to result in economic growth, in the 1990’s the Chinese government allowed even greater economic freedom. The growth of the Chinese economy during the 1990’s was astounding. They have not yet allowed personal freedoms and human rights that are essential for well being and cultural growth. But the economic gains speak volumes.

Before allowing economic liberty, China was impoverished. Their people starved from want of basic foodstuffs. After allowing just enough economic liberty to prove that it creates economic growth, China's economy has grown continuously. Increases in economic liberty have resulted in even greater economic growth. China shows how incredibly important, and essential economic liberty is.

What if tomorrow, the Chinese government removed all regulatory, economic controls? What would happen? By this I mean, that all trade barriers were removed. All government control of lending disappeared. Bonds, credit, and financing became entirely private concerns. Manufacturing controls were entirely removed. Import and export restrictions were eliminated. Business decisions were entirely privatized. What would happen if the Chinese government allowed Chinese citizens and businesses perfect economic freedom?

Let’s review. In 1960 Chinese people had no economic freedom and they were dying by the millions. In 1980 some Chinese people had economic freedom and they began creating noticeable economic growth. By 1990 Chinese leaders wanted more economic growth so they allowed radically increased economic freedom. By 2000, China’s economy was larger than India’s. By 2010 it was larger than Japan’s. The Chinese GDP is expected to surpass the United States in 2030.

So what would happen if the Chinese government allowed its citizens perfect economic freedom? I think their economy would be the strongest and most dynamic in world history. They would soon be the richest and most powerful nation by any economic measure. But this isn’t a secret that only the Chinese can possess. Economic liberty would do for India what it did for China. It could do the same thing for Brazil or Germany. Russia or Zimbabwe.

Look at Singapore. Economic liberty brought them incredible economic gains. The “Spanish Miracle” was the result of economic liberty. The Spanish economy had lagged for decades under autocratic, government control of the economy. Only when the Spanish government began to allow some very few of the rights of man, that pre-exist government, did the economy grow noticeably. The economic gains were considered miraculous. Was there a miracle?

The miracle is contained in each of us. We are the miracle. People want to improve their lives. People can produce more than they consume. People can adapt and solve innumerable problems when allowed to do so. We are the engine of the economy, but we are not machines. We are free will beings. We have thoughts and beliefs. We make decisions, and we take actions. Or we decide not to act. Our lives are the basis for our economy.

With human life as the basis for the economy, we can look at this and see how we think it would work better. Generally speaking, when someone is making something, are they better suited if someone comes along and gives them a 1” stack of paper and tells them that failing to comply with any of the provisions stated therein will result in large financial penalties and possibly jail time? Well, if they can’t hire an attorney to read that 1” stack of regulatoryness, they might find it easier to stop making anything at all. The guaranteed outcome from all the many people who just go the 1” regulatory compliance stack is this: fewer products produced, higher costs, fewer jobs, and a smaller economy.

Every economic regulatory burden means fewer jobs, fewer products, and a smaller economy. There is no way around this. Economic regulatory burdens raise the cost of doing business. They raise the cost of products sold. Ask any economist what happens when you raise prices. You sell less of it. You buy less of it.

What can America learn from the ranking of the world’s nations by their freedom? We shouldn’t just be #1. Yes, we should be number 1. But we should be far and away number 1. There shouldn’t be any nation on earth that has more freedom than us. We should not settle for being near the top. We should be making progress towards freedom every day. Freedom should be the word on the street. Freedom should be the word on Capitol Hill. Freedom should be moulded into the hearts of every man, woman, and child in America. We should and we can.

Our economy doesn’t need to be eclipsed. I’m saying this not out of fear that other nation might now or one day have a larger economy. I’m saying this because we owe it to ourselves by the Golden Rule. Treat others as you want to be treated. Do you want people placing economic, regulatory burdens on you? No? Well, then don’t place them on others. It’s that simple.

Even if China, Germany, India, or any other nation had a larger economy, if we followed the Golden Rule of economic progress, we would be much happier, simply that we were free. We could make all the business decisions, as we saw fit. That goes equally for employees and employers. No one should ever get a larger dose of liberty than someone else.

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