The Sizzle of Economic Freedom

Freedom lovers have long tried to win converts — and especially voters — by appealing to first principles of classical liberalism embraced by the Founding Fathers: above all, the inalienable right of an individual to chart the course of his own life. This approach has had limited success, because most Americans do not feel unfree. Instead of selling the freedom steak, perhaps a better approach would be to sell the freedom sizzle: all the secondary benefits that flow from greater economic freedom.

Economic freedom is the right of individuals to pursue their interests through voluntary exchanges of private property under the rule of law. This freedom forms the foundation of market economies. The premise of this report is simple: Most Americans do not realize what the restrictions on their economic freedom are costing them. Americans would likely demand more economic freedom, and be willing to pay a higher price to achieve it, if they knew about the benefits that would flow to them in return.

Because of advances in research, there is now a large body of scholarship that has quantified the benefits of economic freedom to individuals and to civil society generally. This report describes in easy-to-understand language the benefits of more economic freedom and the costs of imposing more restrictions on free enterprise and consumer choice.

The benefits of greater economic liberty include:

• Higher personal income
• Less unemployment
• Faster economic growth
• More macroeconomic stability
• Greater capital investment and productivity
• More business startups
• More entrepreneurship and innovation
• A better-educated workforce
• Less poverty and inequality
• Better health
• Greater population inflows
• A cleaner environment
• Better quality of life
• More democracy and peace

The benefits of greater economic freedom are sweeping and substantial for individuals and societies. In the future, Americans might still vote for restrictions on economic freedom, but this study will allow them to cast educated votes. They will know what they are losing through having less economic freedom and what they would gain from having more economic freedom. The price of infringements on economic freedom is substantial, though often not easily or immediately seen by citizens, voters, and taxpayers — or by their lawmakers. This does not mean the costs are any less real. Understanding the trade-offs is especially important in a slowing economy, when jobs are scarcer and incomes are falling.