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July 6, 2021 Reading Time: 5 minutes

The advent of the modern state has subjected humanity to a great many social experiments, some with glorious results, most absolutely horrific. We have seen all too often genocide, artificial famines, war, repression, and the disruption of social fabrics through poorly thought out social programs. The state has also been successful at facilitating and maintaining relatively prosperous societies.

We know today beyond a shadow of a doubt that governments which uphold economic freedom, individual rights, and the rule of law are able to produce more prosperous societies than those which do not. That is because people are firstly individuals, not components of unique collectives that somehow have different needs and contexts.

At the same time, we have seen the experiments in authoritarianism and state planning that became the scourge of the 20th century, some of which are still going on today. Although there is certainly room for deviation on the margins, knowing what we know, there is no excuse for governments to keep their populations poor with crippling economic and social policies. 

What is the State and Why Does It Matter

The state by formal definition is a monopoly on legitimate violence. At its core, the government is the one entity in society in which we generally accept its ability to exert force over consenting or unconsenting individuals.

There is certainly a debate over how much power the state should have, if any. Some, like Trinity College Professor Dr. Edward Stringham, have outlined compelling cases for the complete privatization of everything and the abolition of a coercive state in favor of pure voluntary interactions facilitated by the market. Others, like legal scholar Richard Epstein, believe that a limited state is necessary to secure important things such as private property rights, individual rights, and to perform minor interventions in society to ensure that things do not get out of hand.

Harvard professor of psychology Steven Pinker, in his book The Better Angels of Our Nature, outlines how human civilization has gotten far less violent through the ages. He cites the advent of the modern state, particularly liberal democracies, as a contributor to that phenomenon. These are examples of market-anarchist and classical liberal thought on the role of the state, which boils down to securing individual rights while facilitating voluntary activity.

Conservatives and Progressives also have their own ideas, such as the necessity of upholding important moral values and correcting for inequities in society respectively. At the end of the day, people desire a system that can allow humanity to escape the Hobbesian state of nature, where life is nasty, brutish, and short. 

State-Stunted Prosperity

There is certainly plenty of room for a good-spirited debate on how high taxes should be, how large the welfare net should be, what should be taught in schools, and so on. Although we can have strong opinions on such matters, we shouldn’t be in favor of putting politicians on trial for favoring slightly higher taxes and teaching critical race theory. Another reason is that such policies are not objectively damaging to the point that implementing them warrants delegitimization. A pluralistic society requires room for such disagreements and debate. 

However, we can say that about authoritarian governments that do not follow the rule of law and steal people’s freedom. Human civilization is currently in a phase known as The Great Enrichment, which is categorized by exponential levels of economic growth compared to the rest of human history. Since the 17th century, when ideas concerning individual rights and economic freedom began to spread, humanity changed forever for the better. That is because when people are free to live their lives without government oppression and do business without the arbitrary hand of the state in every affair, they prosper. It’s basic common sense; oppressed people do not thrive. 

One does not need to do anything except look at any economic freedom index. There is not a single country that respects markets, individual rights, and the rule of law that does not thrive. There is also not a single country that abuses these principles that does not suffer. Of course, there are plenty of countries that fall in the middle, such as China, which upon a basic analysis show that its liberal reforms, to the extent they have occurred, have resulted in success. Whereas, its authoritarian practices demonstrably hold it back in many areas. 

Asia, for better and for worse, is full of stark dichotomies of free and unfree countries. China and Taiwan are two examples. Taiwan, which is just off the coast of China and essentially a Western-style democracy, has a 2.8 times higher GDP per capita, half the poverty rate, and over half the infant mortality rate. Both these countries had their current regimes established during the 1940s, except one chose freedom, while the other continues to be authoritarian with limited market policies. In fact, China was exponentially worse off before 1978, when it introduced pro-market reforms which led to drastically higher standards of living.

South Korea and North Korea are even greater examples as South Korea, much like Taiwan, is a Western-style democracy with relatively free markets and North Korea is Communist. The only thing that separates these two countries is an arbitrary line drawn on the once united Korean peninsula after the Korean War. Even though North Korea started out richer than South Korea after liberation from the Japanese Empire after World War II, South Koreans today enjoy over 23 times higher GDP per capita, 3.8 times higher access to electricity, and almost 90 percent fewer deaths during childbirth. 

There is no excuse. These countries have similar cultures, virtually the same geographic positions, and in the case of the two Koreas, the same histories.

If you need more evidence simply look at the fall of Venezuela, which went from one of the most prosperous countries in South America to a desperate nation with crippling shortages. Among a number of factors, adopting Socialism was a strong contributor. Even Britain fell victim to a brief stint with Socialism, which resulted in the turmoil of the 1970s which granted it the nickname “The Sick Man of Europe.” Britain has since rejected those ideas and is currently back to being one of the most prosperous countries in the world. There is also Eastern Europe under Soviet rule, which stood in stark contrast to prosperous Western Europe. After the fall of the Soviet Union, virtually every country except Russia believes that living standards have improved.

Time after time, the combination of economic freedom, individual rights, and the rule of law has consistently shown its ability to produce the most prosperity for the most people. Command and control economies under authoritarian dictatorships or even democratically elected governments have offered nothing but stagnation.

Today, ignorance is inexcusable, and it is undeniable what policies lead to economic growth and what keeps people down. Leaders who believe otherwise will continue to blame everything but themselves for not only their failures, but their direct role in keeping their citizens impoverished and miserable. When people are free, they prosper, and when they are not, they suffer. It’s as simple as that.

Ethan Yang

Ethan Yang

Ethan Yang is an Adjunct Research Fellow at AIER as well as the host of the AIER Authors Corner Podcast.

He holds a BA in Political Science with a concentration in International Relations with minors in legal studies and formal organizations from Trinity College in Hartford Connecticut. He is currently pursuing a JD from the Antonin Scalia Law School at George Mason University.

Ethan also serves as the director of the Mark Twain Center for the Study of Human Freedom at Trinity College and is also involved with Students for Liberty. He has also held research positions at the Cato Institute, the Connecticut State Senate, Cause of Action Institute and other organizations.

Ethan is currently based in Washington D.C and is a recipient of the 13th Annual International Vernon Smith Prize from the European Center of Austrian Economics Foundation. His work has been featured and cited in a variety of outlets from online media to radio broadcast.

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