Economic freedom has been on the rise in many countries around the globe. So why has it been declining here in the United States?
The Heritage Foundation’s 2017 Index of Economic Freedom is out, with its country-by-country assessments, and it shows the U.S. rating has dwindled to its lowest level in the index’s 23-year history. The Washington-first, big-government policies of the past eight years have essentially wiped out a decade of progress.
This decline affects all of us. Economic freedom transcends the market. It’s a vital element in creating a society that values and advances opportunity and personal progress.
A true free market is more than just an arrangement of voluntary economic relationships. It’s a proven source of dynamic growth and upward social mobility. Its principles are written into our national DNA: empowerment of the individual, equality before the law and open competition.
Ironically, the rising levels of economic freedom we observe around the world are thanks, in large part, to the historical record of the United States in promoting and defending freedom. Yet the recent record of the U.S. in the index — the undeniable trail of declining economic freedom — is a serious cause for alarm.
So what is the source of this downward trend? The U.S. is lagging because of deteriorations in certain key policy areas. Increased tax and regulatory burdens, aggravated by favoritism toward entrenched interests, have undercut America’s historically dynamic entrepreneurial growth. They’ve confined the U.S. economy to the rank of only “mostly free.”
There is no doubt that America’s dwindling economic freedom has a human toll. Families, businesses and community organizations across America — what the 18th-century philosopher Edmund Burke dubbed the “little platoons” of society — have been squeezed by the government’s assault on our economic freedom.
Despite the ongoing recovery, the economic damage has been extensive. Its legacy includes subpar growth, mediocre business investment and fewer job prospects — particularly for the poor and less skilled.
This is the current status of the nation, and there is no use in denying it. However, it is critical that we understand that the economic reality America confronts is neither a statement of fate nor a forecast. The future is open to recovery. Crafting a better economic future will necessitate a return to the ideas that helped animate our founding: limited government, individual liberty with responsibility, and free enterprise.
Success depends, however, on understanding that economic and cultural factors are inextricably interwoven. Policies that advance economic freedom expand opportunities for workers in all walks of life. The culture of family and community also surely affects the extent to which individuals take advantage of their opportunities. As the late William E. Simon, a former Treasury secretary and a staunch advocate of liberty, once noted:
“(T)he true concept of economic freedom must be understood to be far deeper and richer than the mere absence of restraint, or the license to do as one pleases. The only defensible kind of economic freedom is freedom coupled with a sense of moral responsibility to one’s community and country, to the values that bind us.”
Fortunately, the greater calling for conservative solutions on many policy fronts in recent years points to new hope for revitalizing America’s economic freedom. That work will surely entail the rise of a new generation of leaders willing to relearn the crucial linkage among economic freedom, personal responsibility, opportunity and empowerment.
Analyzing economic trends is a critical first step toward inspiring the resolve to get America back on track and reinvigorate the free-market dynamism that ensures opportunity for all but favoritism to none. Now is the time to rebuild and deploy America’s principled policy toolkit. The 2017 Index of Economic Freedom serves that goal.
Anthony B. Kim is a senior policy analyst in the Center for Free Market and Regulatory Reform at The Heritage Foundation.