Regulatory Roadblocks Hurt the Poor

Mackinac Center - When people hear the terms “capitalism” or “free markets,” often their first thought is that these are systems mostly benefiting the wealthy. In fact, the evidence suggests that it is actually the poor who gain the most from economic freedom.

It is abundantly clear that living in countries with lower taxes, fewer regulations, a rule of law and generally limited government makes all citizens better off. One interesting statistic: Those reading this article are likely among the very wealthiest — earning $34,000 per year puts one among the top 1 percent in the world (and half of the “one-percenters” on earth live in the United States).

And when you break it down, the poor are significantly better off in free-market systems. In countries with the most economic freedom, the rich earn eight times as much compared to the rich in the countries with the least economic freedom. But the poor in the nations with the most economic freedom actually earn 10 times as much as the poor in the countries with the least.

Arthur Brooks, president of the American Enterprise Institute, frequently makes the case for why free-market solutions and economic freedom are not just for people who are “rich.” His recent piece in the Wall Street Journal is a good example.   More