American free enterprise is the greatest force for human flourishing in all recorded history. Far from political sloganeering or hyperbolic nationalism, this statement is a verifiable historical fact.
From the earliest written records thousands of years ago all the way until 1900, the human condition around the globe was stuck. Global life expectancy hovered around 30 years. Within those years of life expectancy, the typical human experience was one of deprivation. By any modern standard, even the best historical living standards would be unimaginable. While the details varied from culture to culture, the pattern of subjugation that follows deprivation did not vary. Universal individual rights now thought of as sacrosanct were historically battered by royalty, dictators, strongmen, and tyrants.
What broke thousands of years of this pattern? One, single, American Century.
Life expectancy at the beginning of the American Century was the same 30 years old it had been since the time of ancient Sumerian cuneiform. By the end of the American Century, global human life expectancy was approximately 73 (and more like 76 in the U.S.A.). Within those years, more people have more access to more of life’s necessities than ever before. For the first time in recorded history, we began losing more of our poorest to diseases of excess (e.g. obesity and diabetes) than to diseases of deprivation as had been the global historical norm.
The American Century was the coming of age of the radical ideas of our founding. Those ideas include that our rights are not derived from the government, that we’re all created equal, that we must all have equal access to the marketplace, equal justice under the law, and that government’s just powers are derived only from the consent of the governed.
These ideas allowed the marketplace to work without the political and artificial limitations previous systems had imposed. By allowing broad access to the marketplace, and by allowing everyone to compete, innovate, and demand better in their own lives, the American Century drove more innovation and improvement than the globe had ever seen.
This progress, and the shared prosperity it brought, is only available in a system of healthy American free enterprise. No other system has ever broken the historical norms of deprivation and subjugation as our system has. That’s why we have identified the ten foundational principles that must be protected and expanded if we want to open another American Century, and all of the human promise it can bring.
Check out the American Free Enterprise Bill of Rights here.
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The biggest threats to America’s position come not from anything that’s fundamentally wrong with business culture or fundamentally wrong with the economy; it comes from poor government policies having to do with entitlements, regulations, and poor financial sector management. We need to address those so this sort of unique genius of America for creative destruction can once more express itself.
As Rafael Di Tella and Robert MacCulloch have shown, the world’s poorest countries are not characterized by naive trust in capitalism, but by utter distrust, which leads to heavy government intervention and regulation of business. Under such conditions, capitalism does not thrive and economies remain poor.3
Francis is right to focus attention on the plight of the world’s poorest. Their misery, however, is not the consequence of unbridled capitalism, but of a capitalism that has been bridled in just the wrong way.
According to Norberg, 200 years ago, at the birth of capitalism, there were only about 60 million people in the world who were not living in extreme poverty. Today there are more than 6.5 billion people who are not living in extreme poverty. Between 1990 and 2015 alone (in Thomas Piketty’s view the devastating years in which social inequality rose so sharply), 1.25 billion people around the world escaped extreme poverty—50 million per year and 138,000 every day.