| "Economic freedom" is a loaded term that carries a lot of unexamined ideological baggage. It presumes without evidence that unconstrained markets allocate resources better than regulated markets. It's a strongly held belief that is impervious to experience. Since "free" is better than "unfree", naturally economic freedom must be better than any alternative, right? But word games like this don't shine much light on what actually works in the real world. What happens when free-market ideology meets the real world? Let's compare the labor markets in Germany and California. The German minimum wage is about $10.78 at current exchange rates, 20% higher than California's recently increased minimum of $9.00. Germany has far greater and more intrusive regulation. German taxes are much higher. In almost every way, California has greater economic freedom than Germany. What are the results of California's relatively greater economic freedom? California's economy produces a few more billionaires than Germany does, which benefits a small number of people. But the vast majority of Californians are worse off than Germans. The unemployment rate in California is much higher than in Germany. More Californians want jobs but can't find them, or are working part-time when they want full-time work. Millions of Californians don't have health insurance or retirement security. More Californians than Germans are homeless, living in their cars, or in abandoned buildings, or on the streets, or in shelters. More Germans get at least four weeks of paid vacation per year than Californians. Where is the empirical evidence that "economic freedom" delivers better results for more people than other systems? On the contrary, free-market ideology seems to create extremely good outcomes for the few at the expense of the many. |