President Joe Biden’s July 9 executive order, “Promoting Competition in the American Economy,” states: “The American promise of a broad and sustained prosperity depends on an open and competitive economy.”
The directive further notes:
For workers, a competitive marketplace creates more high-quality jobs and the economic freedom to switch jobs or negotiate a higher wage.
For small businesses and farmers, it creates more choices among suppliers and major buyers, leading to more take-home income, which they can reinvest in their enterprises.
For entrepreneurs, it provides space to experiment, innovate, and pursue the new ideas that have for centuries powered the American economy and improved our quality of life.
And for consumers, it means more choices, better service, and lower prices. Robust competition is critical to preserving America’s role as the world’s leading economy.
Indeed, at the core of the intended course of “promoting competition” should be policies that enhance economic freedom and encourage the dynamism needed to preserve and sharpen America’s overall competitiveness.
Unfortunately, contrary to its claims of fostering greater competition, the Biden administration’s new regulatory order seems more likely to subdue it, hampering innovation in the end.
As summed up by my colleagues at The Heritage Foundation, “The order protects failed incumbents [currently dominant businesses] by encouraging them to go to the government for favors to help them against companies that customers actually prefer.” (The Daily Signal is the news outlet of The Heritage Foundation.)
A better way respects the market discipline that requires companies to seek ever-better ways to respond to their customers’ needs.
That discipline, reflected by declining sales or lost market share, is key to the capitalist system.
The undeniable link between economic freedom and prosperity is a striking demonstration of what people can do when they have maximum opportunity to pursue their own interests under fair laws, limited government, regulatory efficiency, and market openness.
Congress should act now to safeguard and revitalize an America where freedom, opportunity, and prosperity may thrive.
For more than a quarter-century, The Heritage Foundation’s annual Index of Economic Freedom has measured the impact of economic liberty and free enterprise in countries around the globe. The strongly positive correlation between a nation’s level of economic freedom and its citizens’ overall standard of living and competitiveness underscores just how critical economic freedom is in practice.
This correlation is the reason why so many countries seek ways to enhance their economic freedoms and, ultimately, the real success of their people.
At bottom, economic freedom is about much more than a business environment in which entrepreneurship and prosperity can flourish.
With its far-reaching impacts on various aspects of human development, economic freedom empowers ordinary people, unleashes powerful forces of choice and opportunity, nourishes other liberties, and improves the overall quality of life.
No other system—and many others have been tried—comes close to the record of free market capitalism in promoting growth and enhancing the human condition.
Regrettably, after reaching a high score in 2006, the United States fell from the “Free” category to “Mostly Free” in 2010. Economic freedom has continued to slide, hitting an all-time low in 2021, putting America behind 19 other nations in the Index of Economic Freedom.
America’s economic freedom is under assault from massive government spending bills that drive the country and its citizens deeper into debt, and the taxes that must ultimately pay for the government’s spending spree shift the freedom to choose from the individual to the government.
Economic freedom is also eroded, however, through small, seemingly innocuous regulations, such as efficiency requirements for light bulbs and toilets, and through “social justice” mandates that affect hiring, terms of employment, or the provision of services.
Contrary to what some politicians argue, America’s competitive position is not threatened because the federal government is not spending or doing enough. Instead, the problem is that government has grown too big in terms of its scale, scope, and power over people’s daily lives.
America needs limited government—not expanded and expensive government—to ensure a transparent and competitive economic environment, one where citizens enjoy the freedom and opportunity to prosper to the fullest extent.
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