“Without economic growth, there is no wealth to share.”
Lessons for America?
Welcome to another edition of Friday’s Philosophical Foray beyond Healthcare!
One of the most important history lessons in the power of economic freedom to alleviate poverty and improve the lot of the ordinary citizen did not occur during the industrial revolution in America. It has its roots in a relatively obscure Swedish leader & political philosopher. He was a Finnish-Swedish clergyman, writer, and political philosopher, whose ideas and advocacy pre-dated that of Adam Smith.
The freedom of Swedish people to pursue self-determination which empowered individuals to trade, act and associate voluntarily with others was championed by the words & deeds of Anders Chydenius (1729 – 1803).
After his death in 1803, Chydenius’s libertarian ideas where perpetuated by the Aftonbladet news publication in Stockholm, a news outlet started by Lars Johan Hierta, which was instrumental in spreading the message of economic freedom against the guilds and mercantilism which dominated Swedish economic policy under the King.
In 1840, the new Finance Minister Johan August Gripendstedt, the architect of Sweden’s new market economy, continued the market reforms. His policies ignited economic expansion and growth based on free trade, sound monetary policy and modicum of govt regulations.
Between 1850 – 1950, Sweden’s per capita GDP increased almost seven-fold. Infant mortality improved by 86% and life expectancy increased by 26 years! By 1950 Sweden was one of the richest developed countries and had one of the most open and deregulated economies in the world; with tax rates LOWER that the United States and most European Countries.
Until 1960, Sweden had low taxes, minimal gov’t intervention in the economy, free trade and strong private property rights.
To explore this subject in detail, please watch Johan Norberg discuss Sweden’s rise to prominence in his video below.
The notion that there are only two options for healthcare… 1) Central single payer systems vs 2) The current U.S. system or worse…is a false dilemma with false choices.
Efficient economies (socially sustainable marketplaces) utilize multiple financial tools depending on hierarchy of need or desired outcome. And successful self-regulating systems keep as many incentives aligned at the level of the individual end-user as possible; and ensure individual liberty as a first principle.
The desirable balance minimizes tragedy of the commons, maximizes individual responsibility, minimizes bureaucracy & waste, shames/ discourages rent-seeking behavior & cronyism, aligns reward with effort & risk, and always strives to preserve the sovereignty, liberty & choice of the individual as a preeminent principle.
Centralized tax-funded systems often crowd out these other needed tools within the marketplace and are biased heavily towards collective budgetary priorities, as opposed to individual needs/variations.
“United States would be almost as poor as Mexico today if growth was just one-percentage point less every year starting in 1895.
That was just a hypothetical exercise.
There are some very sobering real-world examples. For instance, Nima Sanandajipointed outthis his country of Sweden used to be the world’s 4th-richest nation. But it has slipped in the rankings ever since the welfare state was imposed.
Venezuela is another case study, as Glenn Reynolds noted.
Indeed, according toNationMaster, it was the world’s 4th-richest country, based on per-capita GDP, in 1950.”
Personal liberty requires economic liberty; when the latter is suppressed, the former can never manifest.
Whether you’re more in the Orwell camp or the Huxley camp, the problem always begins with a healthy dose of collectivism or statism. Throughout the 20th century, these socioeconomic conditions always seems to deteriorate into oligarical collectivism and eventually into totalitarianism.
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