Economic Freedom and a Better Life

Everyone wants to make the world a better
place. But not everyone understands how economic freedom leads to wellbeing. The cornerstones
of economic freedom are personal choice, voluntary exchange, the freedom to compete in the markets,
and private property rights. These freedoms comprise the core of what’s measured in
the “eEconomic fFreedom of the wWorld” report, which provides further evidence of
the positive relationship between economic freedom and economic growth. An easy way to see this positive relationship
is by breaking up the countries of the world into four4 groups, based on their economic
freedom. In 2008, the 25 percent% of countries with the least economic freedom had GDP per
capita of just under $4,000 dollars. In contrast, the freest 25% percent of countries had GDP
levels over $30,000 dollars per person. What emerges from this figure is unmistakable.
Freer countries have substantially higher incomes. But what does economic freedom have to offer
those who don’t directly value economic freedom? Oor the higher consumption levels
that growth provides?. What if, instead, you value living longer, or better health, or
the wellbeing of the poor? Economic freedom is positively related to all of those things
and more. For example, using the same four4 groups, let’s look at the relationship between
economic freedom and life expectancy. The average life expectancy at birth for those
in the least free group is under 60 years. Compare that to the freest countries, where
life expectancy at birth is almost 20 years higher. Think about it;, that’s almost an
entire generation. So one of the differences between economically unfree and economically
free countries is how much time average citizens get to spend with their grandparents. So that was the average person, but what about
the poor, the bottom 10 percent%? If we look at this relationship, we see that the poor
get roughly the same share of income in unfree countries as in free countries. But remember,
incomes are higher in more economically free counties. This means that if we look at the
actual income level of the poorest 10% percent, we’ll see that they’ll have substantially
higher incomes in more economically free countries. But it’s more than just income. There’s
also a strong relationship between economic freedom and other good things, like happiness
and life satisfaction. It gets better. The more economically free countries also have
less of the bad stuff, from child labor to political corruption. So by expanding economic
freedom, —the freedom to make personal choices, start businesses, trade with others, and own
property, —we get less of the bad and more of the good. Even if you could care less about
economic growth, there’s abundant evidence that economic freedom gives people both the
liberty and wealth to improve the quality of their lives.

32 thoughts on “Economic Freedom and a Better Life

  • Less corruption? So for example a walmart moving into town and ruining a local mom-and-dad store you don't see as corrupt behavior?

    More freedom? Whoever has the most money to advertise themselves to the position in the goverment they desire is usually the one who gets elected! This is no goddamn freedom, this is picking the aristocrat you want to run the country for the next couple of years, with no say on how to do it!

    Also, I would like to submit communist china as evidence to the contrary!

  • @Beef1188 Ok… (1) There is NOTHING wrong with Wal-mart competing and beating out other businesses. It's actually good for everyone. (2) What you are complaining about in the 2nd paragraph is not capitalism but corporatism–two very different things. (3) I am not following your logic. You think China is any kind of a model?!

  • @cbl2988 Ok lets examine that. You say its okay for walmart to do that:

    Essentially, one of the benefits the free markets system proposes is the principle "more for everyone". Now if a large firm like walmart hoggs it all then how is that a good thing for everyone? How is this more for all?

    What the free market is, is an oppurtunity to invariably transfer wealth to a small group of individual firms with flagrant disregard for the "average man" to sustain a little buisness for himself!

  • @Beef1188 Are you a socialist or something? It is virtually impossible to have a coercive monopoly in a free market system. The only monopolies that have ever existed have done so with government help. Socialism causes as much "hogging" (rationing) as anything else. You talk about capitalism as if it were some zero sum game. That is the oldest and biggest fallacy in the book. Capitalism has done more for the "average man" than any other system could ever hope to achieve in a blink of an eye.

  • @cbl2988
    I agree with you, it has done more for the average man, but in the past. Now however, it has become so distorted, that the human concernes have become secondary, if there at all. It has gone out of control.

    It is time to move on. Introduce access instead of property. Instead of buying for example a lawnmover, borrow one from a library – like facility then return it when not needed. People have too much junk at home, most of which they only need once a year.

  • From slavery to feudalism, from feudalism to capitalism, time to move from capitalism closer to direct democracy.

  • @stutek What most free marketeers fail to tell is that money system is actually a social contract, just like the 5 year's plans in past communist countries. The significant difference is that money is (up until now) the best try to achieve direct democracy, where each $ is a vote on what needs to get done in society. But it has a fundamental flaw, the ones with more $ get more power over the ones with less $ and thus the system undermines itself due to imbalance.

  • The current difference between the least free and the most free is that the most free are the ones MOST IN DEBT. Their freedom has allowed them to spend and spend beyond their economic capacities.

  • Anyone who is watching this video remember this, Coorelation NEVER equals Causality. Just because things appear to coorelate may not mean anything at all. He's spinning it in a way where economic freedom is the reason for all of this, when it may be something else entirely. It might be that those countries are more stable and that's the reason why people make more money, and are happier, heck it might even be because we eat more oranges per day than those countries. Take a critical approach.

  • @WoWFanX I have a hard time believing oranges are the result in such large differences. And when EVERY free country is better than non-free countries i will place my bets on living in the free countries. And the United States was not stable when it started, we had rebellion after a few years, but our freedom eventually got us on track. And why would you want to live in a less free country?

  • @macy725 I'm just saying that there are several things that are not factored into this, that's all. I just threw in the oranges bit to make a point, and no I love living in a free country, I'm just saying that it's not the only reason for economic freedom, or maybe even not a significant reason.

  • @WoWFanX if have deeper understanding of economic you understand that if there more economic freedom it is easier to start your own businesses and more people starting. which also means you are more like get your dream job. yes the government are more stable and take skill to create free market free of fraud and keep people form rigging the markets.

  • It is amazing how ideas from 18 century could survive and being consistent in the much different nowday's world.

  • so, China is expected to surpass America's GDp by the end of this decade, yet it has little economic freedom, how do you explain that?

  • ok, how do you explain the Nordic model of the Nordic nations such as Denmark, Iceland, Norway, Sweden and Finland?

  • I laugh at this because the United Stated brought down all of the numbers on the most economically free countries list. But that is because we have moved away from a either a free market economy, or a social free market hybrid economy like Europe and moved towards corporatism where the big businesses change the rules so there isn't competition.

  • freedom? i think he has it for the more money you have the more freedom you have. if you have money and break the law you just pay the fines. you can still do it but it just cost you. american and many other rich countries are less free for most people because they have many… many more laws and the more laws there are the less free the people are. most people this does not bother because of income. you get into the lower incomes and you start to see how unfree you really are when you can't pay for your freedoms. taxes to live on properties, taxes just to work, permits and other fees for many things to do very basic activities. this being said is that you can be poor and no freedoms in these so called free countries you just have to figure out how to get a passive yet low income and be more free in another country. again its about income on your freedom and i believe that part to be true.

  • You're making statements that aren't always true. Denmark has very restrictive policies when it comes to the economy, as they are very Socialist, but they have one of the healthiest and happiest people in the world. Hong Kong is the most free (economically speaking) in the world, but they don't have a very happy population. The US is still very free, but living here, we have a huge middle class that is shrinking (becoming more poor) and the lower class is growing and loosing their income, but the top 1% is gaining more wealth, but as states are becoming more left (Utah, etc), they see an increase in the middle class, a decrease in the lower class, and a more evening out of the upper class.

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