Freedom and Economics

I hope that visitors to this blog have also had an opportunity to click on the link to the Powell Center for Economic Literacy, not just because it's my place of employment and provides me time and shelter to do my posting (among other things); but because it is an important organization with an important mission. If you've not done so, I encourage you to learn about Powell. With that introduction, there are a couple of very good articles that relate to the Powell Center's reason for existence.

The first is from today's issue of The Wall Street Journal. The editorial page features a piece by Mary Anastasia O'Grady on economic development. In the article, she uses the release of the 2008 Index of Freedom to repeat the case that economic freedom and political freedom are linked. The index includes factors like property rights, tax rates, government intervention, monetary, fiscal and trade policies, and business freedom. When I teach my students about economic institutions - the rules and organizations created by society to influence decision-making - all of these factors are included. And they are all important. And while many, myself included, would contend that economic freedom is not an automatic precursor to political freedom; I also agree that economic freedom must accompany political freedom if either are to last.

The second article I would like to draw to your attention is from Policy magazine. Author Peter Saunders is Social Research Director at the Centre for Independent Studies in Australia. It is an independent think tank and has a classical liberal view. The article discusses Why Capitalism Is Good for the Soul. In the article, Saunders examines how capitalism stacks up against socialism, and why intellectuals frequently ally themselves with the latter. One of the more interesting aspects of the article is Saunders' view that while capitalism is capable of delivering the goods (literally) better than socialism; socialism has a "romantic appeal" that capitalism lacks. And in countries that have come to take affluence for granted (see Australia's ranking in the above-mentioned Index of Economic Freedom), it just doesn't impress. One of my favorite parts of the article is the following quote where he compares the two, especially referring to socialism's sense of self-righteousness and certainty:

"Boring capitalism cannot hope to compete with all this moral certainty, self-righteous anger, and sheer bloody excitement. Where is the adrenalin in getting up every day, earning a living, raising a family, creating a home, and saving for the future?" (I'd have to disagree - raising a family, etc. never fails to raise my adrenalin.)

Both of these articles speak to reasons for the Powell Center and why its mission is important. I hope you'll give the articles a look and let me know what you think.