Economics and Happiness

   We as Americans are blessed with the most prosperous nation in the history of the world. Our prosperity affects everyone at every level of society. We can send metal tubes filled with sophisticated machinery to visit and return from a laboratory in perpetual freefall over the earth. We have the knowledge and tools to eradicate plagues that once exterminated entire populations of humans. And even more important, any person in the United States can go to a local deli or supermarket and pick up the ingredients for nearly any meal they want to have that night, regardless of season or their proximity to where that ingredient was produced.

   There are people still alive today that lived in a time when none of this prosperity comprehendible. Americans just a hundred years ago lived in what today would be considered a third-world or developing nation. The source of our rapid growth and development is by no means a mistake, but it was not planned. Modern economists take a more realistic point of view and by looking at the political and economic differences of many nations, they have come to identify the key ingredients to prosperity and happiness.

   For the last decade, The Wall Street Journal and The Heritage Foundation have worked together to produce an Index of Economic Freedom which provides extensive statistics and data based on their research of economies all over the world. By comparing economic institutions among many countries, they have listed ten components necessary for any economy to flourish. The essential idea is that the freedom of a person to own property and trade with as little interference from government or other entity that leads to 2 overall economic prosperity. The conclusion is that such factors including per capita income, political stability, economic growth, environmental protection and the elimination of poverty and disease are all consequences of a liberalized, or unrestricted, economy.

   Some would argue that such measurements are problematic because some cultures and peoples of the world just interact differently than we do and as a result that economic institutions may need to be different. While this is an old argument, its ignorance is evident if we just take real world examples from the various cultures and peoples around the globe. China’s economy has only experienced significant growth after the implementation of certain free market ideas like private property rights. Cuba, once a playground for the wealthiest people in the world, now suffers from an extremely depreciated standard of living compared to that of just sixty years ago. And perhaps the most telling example is the difference between North Korea and South Korea. These are basically the same people with shared language, history, religion and culture and yet South Korea is a modern, developed nation while North Korea experiences regular shortages, famines and blackouts.

   If more people paid attention to the Index of Economic Freedom, widespread problems such as poverty would be much easier to alleviate. Ultimately, it is the free market that creates the most happiness for the most people.