Economic Freedom and Property Rights

Each year, the Fraser Institute releases an Economic Freedom in North America report. In its most recent report, Florida is the most economically free state and Texas is in third place. New York is the least free, and its west coast intellectual cousin–California–occupies the forty-seventh position.

Conservative organizations point out that economic freedom leads to economic prosperity. For example, the Texas Public Policy Foundation argues that the report reveals

that when you divide the North American states into four groups ranked by economic freedom, in the most-free states, the average per capita income was 7.3 per cent above the national average compared to roughly 10.5 per cent below the national average in the least-free states. Per capita income was also found to rise faster in states where economic freedom is growing faster.

Virtually nobody is opposed to economic prosperity. Yet, as the report demonstrates, there is a huge gulf in economic prosperity between states that protect economic freedom and those that don’t.

But what is economic freedom? The Fraser Institute’s website states:

The cornerstones of economic freedom are (1) personal choice, (2) voluntary exchange coordinated by markets, (3) freedom to enter and compete in markets, and (4) protection of persons and their property from aggression by others. Individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. Individuals are free to choose, trade, and cooperate with others, and compete as they see fit.

In other words, economic freedom is inseparable from the recognition and protection of property rights–the freedom to create, attain, use, trade, and dispose of material values.

Any attempt to attain economic prosperity while trampling property rights is intellectually dishonest and doomed to failure. As evidence, witness Nazi Germany, every communist country in history, and Venezuela today (to name a few examples).

When property rights are not protected, individuals do not have the means to prosper and flourish. They do not have the freedom to create and trade the values that life requires. They cannot plan and save for their future, because their plans can be destroyed and their savings can be seized when the right to property is not protected. As evidence, witness Nazi Germany, every communist country in history, and Venezuela today (to name a few examples).

If we value economic prosperity and the opportunity for every individual to flourish, then we must defend property rights.