Opinion: The tide could be turning towards greater economic freedom

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Canadians will have the opportunity to make their voices heard on economic freedom in the upcoming federal election

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“The tide is turning” towards economic freedom, wrote Milton and Rose Friedman in 1980 in their bestseller Free to Choose. “The backlash against big government was sparked by runaway inflation” and “the contrast between the ostensible purpose of government programs and their actual results.” This reaction partly led to the election of Margaret Thatcher in 1979 in the United Kingdom, the victory of Ronald Reagan in 1980 in the United States and the landslide victory of Brian Mulroney in the 1984 federal election in this country.

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Now, after 15 years of shrinking economic freedom, bigger governments, green initiatives and net-zero green initiatives, and now rampant inflation, could the tide turn again?

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Liz Truss, an avowed admirer of Mrs Thatcher, recently won the post of British Prime Minister with a Thatcheresque message. In her first official statement, Prime Minister Truss said: “What makes the UK great is our fundamental belief in freedom, enterprise and fair play… I have a bold plan to grow the economy through tax cuts and reforms. Last week, its Chancellor of the Exchequer, Kwasi Kwarteng, took the first steps to implement it.

In the United States, as we approach the medium term, Americans can begin the process of potentially moving the country in a different direction toward greater economic freedom, with the possibility of even more change in 2024.

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And of course, in this country, Pierre Poilievre was recently elected leader of the Conservative Party. Poilievre appealed to young Canadians with his “Take back control of your life” message: “I am running as Prime Minister to put you back in charge of your life and make Canada the freest nation in the world… In a country free, a smaller government makes room for larger citizens. In the next federal election, currently scheduled for 2025, Canadians will have the opportunity to make their voices heard on economic freedom, which has waned in recent years as governments in Canada have expanded their roles.

The recipe for pro-market government hasn’t changed since the 1980s. Cut government spending so that individuals, families, entrepreneurs and businesses—rather than politicians and bureaucrats—decide where resources to company are allocated. Reduce marginal taxes to encourage individuals to work, invest and undertake entrepreneurial activities. Securing and protecting assets. Respect the rule of law. Control inflation. Reduce regulations and remove barriers to trade.

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These policies allow workers, entrepreneurs, investors, business owners and families to decide where to invest their labour, savings and entrepreneurial energy. Time and time again, when government allows individuals and families to exercise greater control over their economic lives, people prosper.

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And it’s not just a talking point. The evidence is clear.

A new study published by the Fraser Institute examines more than 700 studies that appeared in academic journals from 1996 to 2022. The majority of these studies, which all used the Economic Freedom of the World index developed by famous economists, whose prices Nobel Friedman, Douglass North and Gary Becker, found that economic freedom leads to increased economic growth, productivity, investment, entrepreneurship and innovation, reduced conflict and civil unrest, better environmental outcomes, and improved human rights and social development.

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In other words, if we want better economic and social outcomes, we must rely primarily on individuals, families, entrepreneurs and business owners, not politicians and bureaucrats, to make economic decisions. .

Unlike the tides, however, there is nothing inevitable about this. COVID-related lockdowns and restrictions, runaway inflation, and an energy crisis created by government policies appear to have sparked renewed support for greater economic freedom. But there is always the danger that this effect will be short-lived and may be followed by a return to ever greater government. Yet, as the Friedmans optimistically noted in Free to Choose: “As a people, we are always free to choose the direction in which we should go – whether it is to continue on the road we have walked towards a ever greater government, or to stop and change direction. .”

Ask me for a change of direction.

Niels Veldhuis is President of the Fraser Institute.

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