Just a short one this time. I'll be returning to my previous topic of nuclear power soon - and I haven't forgotten my promise to revisit the various trade war scenarios either. A story flew under the radar recently that I think deserves a little attention. The folks at the Legatum Institute have been producing the World Prosperity Index since 2007. This is a comprehensive report that ranks nations based on 89 different criteria that relate to the relative prosperity and security of the nation in question. For the past three years, the United States has been in the Top 10 (for 2010, the US comes in at #10), and the top 15 for 2010 is comprised exclusively of nations that are considered part of the global free market economy.
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| Also known as "English speaking nations". |
This is an important question: what drives free markets to the top of the prosperity list? Is it the very essence of economic and political freedom that these nations embody? Or perhaps the population is simply happier in these nations, since the human condition - the very soul of man - yearns for the experience of freedom. Or perhaps it is because many of these nations were the first to rise to power in the industrial age, and managed to secure a solid foundation for themselves before the turmoil of the 20th century.
It is often noted that the United States was herself extremely lucky to have been separated by wide oceans from both of it's principal opponents during the Second World War. With no bombs raining down on Providence or Wichita or San Diego, the US survived the war with it's national grid largely untouched. In fact, it was improved tenfold during the war due to the needs of the wartime economy and military production demands. Bomber factories, chemical plants, and the top-secret Manhattan Project, all demanded new and greater infrastructure and power generation to support their operations, and American industry was up to the task. Because of our relative isolation, we managed to avoid difficulties like constant rebuilding and the growing fear of invasion that nations such as Australia and England were facing.
Much more than safety and solidity was involved in the success of the United States and other free nations. After all, Europe was devastated during the war, but many of the top ranked nations are European free-markets. Freedom drives innovation, the undisputed spark of humanity. Innovation breeds progress, as ideas are grown, cultured, and harvested to be put to the test in the real world - the world of the free marketplace. This exposes the idea, or invention, or product, or service to the scrutiny of those who participate in the economy. These consumers can choose whether the idea is worth investing in, and choose when and how much to invest. Ultimately, it will be the consumers who will judge the inherent value of the idea, or product, or service. Lacking the threat of force compelling one to submit to this idea, it can be discarded or cherished, forgotten or memorialized, ignored or institutionalized - all at the whim of it's various consumers. As the idea lives or dies under the peering eye of the marketplace, a new idea - either replacement or complement - will eventually be born.
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| And sometimes this happens . . . |
The creation and success of ideas also depends on the marketplace, and it's oft-mentioned variables of supply and demand. The "invisible hand" of the free market is not invisible at all. It's all around us, or at least all around the residents of those lucky nations with free market economies. My wallet may only be a single mitochondria inside a single lowly cell of this "invisible hand", but in biology as well as economics, sometimes a single bad gene can cause a cataclysm - or a single antibody can save a life. Somebody had to be first to purchase an automobile, or a telephone, or a drive-thru wedding, or a compact disc. Somewhere out there is the first person ever to pay money for a Swiffer. In each of these cases, the idea won. Not every idea is fortunate or relevant enough to receive a jumpstart such as those products enjoyed, but this can be true for many reasons. Ideas that are not marketed persuasively, or produced in line with an existing need, often sputter and die. Sometimes, when the market realizes what it has lost, they are resurrected; sooner or later, good ideas will prevail.
I'm not going to try and analyze all the resultant data from the Index in this post - I'll leave that for the math professors who enjoy using Excel even when they're not being paid. However, I strongly encourage you to check it out and drill down into some of the categories that are covered. Different data points for healthcare, personal income and sense of well-being, and political stability are all broken down into nice, neat numbers and percentages. Most of the figures are unsurprising. A well-researched compilation, the Prosperity Index is the best proof yet that free markets and free people are the best choice for the future of human development.
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| Some good ideas really enhance human development . . . |
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