Let’s bring the term “Free Enterprise System” back in vogue.
If you are my age or older, you probably remember the term “ Free Enterprise System” being taught in schools. We were taught that if people have economic freedom that the economy will perform better and the entire society will benefit.
Milton Friedman said,
“So that the record of history is absolutely crystal clear. That there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”
A free enterprise system respects private property and the rule of law. It also has minimal intervention within the economy. This freedom gives people the incentive to work and produce. A free and productive society creates wealth for the citizenry.
Can you prove that the free enterprise system works? I think you can. The Heritage Foundation has done a remarkable job with their Index of Economic Freedom. For illustration purposes I have compared the USA to Russia and Cuba.
As you can see by the graph to no one’s surprise, the USA far exceeds Russia and Cuba in economic freedom. How does this translate to helping the ordinary citizen. According to the Heritage Foundation, the gross domestic product per capita in the USA is $48,387. The GDP per capita in Russia was $16,736 while Cuba’s is $10,704. You can expand the scope of comparison and you will find a consistency in the pattern. Countries that utilize the free enterprise system consistently outperform countries who oppress their people and restrict freedom.
Is it a perfect system? By no means. However, I can’t help but think of Winston Churchill when looking at the stark contrasts between the countries who practice freedom versus those who oppress their people.
Churchill said, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
One only has to compare the poverty of repressive regimes to the wealth of our nation to realize we have the best system on earth.