Free-enterprise economies vs. welfare-state economies
November 30, 2006| By Nathaniel Ward
A few weeks ago, economist Jeffrey Sachs penned an article recommending big government as the key to economic growth and the cure for world poverty. Sachs specifically highlighted Scandinavian countries as examples of economically strong welfare states, which he claimed outperform free-market economies like America’s.
Writing on FoxNews.com, Heritage economist Tim Kane debunks Sachs’ contentions about the superiority of the Scandinavian economic model. After crunching the numbers and correcting for what he calls “statistical sleights-of-hand,” Kane finds that
The results paint a much different picture than that limned by Dr. Sachs. Indeed, the population-weighted analyses shows that the Anglo economies are nearly 20 percent wealthier than the Nordics, enjoy faster growth, and have lower unemployment rates. The only good news for the Norsland: The even less-free economies of the EU are even further behind.
In other words, people are better off in economies that stress free enterprise and not government controls on the economy and cradle-to-grave social benefits. Kane concludes that if Sachs “really wants to end third-world poverty, he’d do well to drop the gimmicky Nordic nostrum, and prescribe the tried-and-true remedy of free-market capitalism.”
Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.
