Governments around the world are responding to the coronavirus epidemic with various measures that could reduce economic activity.
It is essential that such actions are temporary and of as short a duration as possible.
Government restrictions and regulations tend to last, sometimes for decades, in the crises for which they were implemented.
Some will try, for their own political reasons, to use this crisis and others, real or imagined, to call for a fundamental restructuring of the American economy or the world economic system.
We must put an end to such discussions.
The Index of economic freedom 2020, published Tuesday by The Heritage Foundation, shows a world more attached to the principles of free market capitalism than ever before.
Some 124 of the 180 countries in the index managed to improve their economic freedom scores this year. The index’s average score is at an all-time high, and the commitment to free market reform is stronger than ever.
The reasons why so many countries have embraced American-style capitalism (though some call it by other names) are clear.
Since the fall of the Soviet Union and its allied socialist / communist governments in Eastern Europe, the world economy has more than doubled in size. Poverty rates have fallen by two-thirds.
The globalization of world trade has brought unprecedented prosperity to the developed economies of North America, Europe and Asia, and fantastic growth opportunities to the underdeveloped countries of the world, notably China and India.
Hundreds of millions of people are enjoying better lives because their governments have taken, at least in part, the American way.
The data presented in the index conclusively demonstrate that citizens of freer societies enjoy much higher levels of per capita income than those who live where governments control most economic activity.
They enjoy longer lives and better standards of health care and education, and live in much cleaner environments.
Countries where economic freedom thrives also have higher economic growth rates, about 1 percentage point higher per year on average. This can add 10% to a country’s standard of living over a decade.
The Economic Freedom Index has a new country topped the list this year, Singapore. This Southeast Asian trade and financial powerhouse is the only country to be ranked economically free in all categories measured by the index.
Other economies deemed “free” this year include Hong Kong, New Zealand, Australia, Switzerland and Ireland.
The United States is only 17e place. It is five places less than last year. Protectionist measures have eroded trade freedom in the United States and our applied tariff rates have increased by more than 50%. This will certainly hold back economic growth in the future, not only here, but also in the countries with which we do business.
High levels of US government spending and debt remain ongoing concerns.
We are obviously going through difficult times, and Americans are concerned about their own health and that of our society.
We rely on our governments – local, state and federal – to help us when times are tough. But we must remember that we live in the most prosperous country in the history of the world, and that the fundamentals of economic freedom have played a vital role in making this happen.
Let’s not joke with them now.