Independence Day is an opportunity to reflect on the importance of economic freedom as a core national principle.
This is not a partisan claim. Economic freedom is not a Democratic or Republican value. It should be seen as an American one. It is a fundamental animating idea of the republic that people should be free to work, build, hire, save, invest, trade and make their own economic choices without unnecessary interference from government.
At various times, both parties have advanced economic freedom through rhetoric and policy action. In 1996, President Bill Clinton told Congress that “the era of big government is over.” The Clinton-era welfare reforms that promoted work and independence rather than long-term reliance on government assistance moved the country toward economic freedom.
President George W. Bush also took important steps to advance economic freedom, including substantial tax reductions.
Neither president was a consistent champion of economic freedom. But these examples show that both parties have, at various points, advanced it.
Neither, however, can be trusted as its reliable guardian.
Democrats have often been skeptical of many policies that promote economic freedom. Many in the party favor higher taxes, more regulation and a larger role for government in managing economic life.
For decades, the Republican Party articulated many ideas closely linked to economic freedom: lower taxes, lighter regulation, free enterprise, property rights, limited government and openness to trade. However, recent developments, especially President Trump’s full-throated embrace of protectionism, are a reminder that political parties cannot be relied upon to consistently apply core principles of economic freedom such as free trade.
The reason political parties are not reliable guardians of any idea, including economic freedom, is that defending ideas is not what they are designed to do. Political parties exist to win elections. They assemble coalitions, respond to voters, follow candidates, absorb public moods and adapt to the political incentives of the moment.
That is why think tanks such as the Badger Institute play such an important role in our civic life. Our organization was created almost 40 years ago explicitly to defend and promote economic freedom in Wisconsin, which we have consistently done in a way no political party could ever be expected to do. Through research, journalism and public outreach, we work every day to help show Wisconsinites which policy ideas will make us more free and prosperous and which ones will have the opposite effect.
That work rests on the conviction that economic freedom can be defined, measured, and connected to outcomes people care about. Decades of research from organizations like ours have shown that jurisdictions with more economic freedom tend to be more prosperous, more dynamic and better able to create opportunity.
Wisconsinites specifically have made real progress over the past 15 years. Our corner of the American experiment has reduced taxes and adopted right-to-work rules that promote a freer labor market. We have gone from being one of the least free states in America to being in the top half, as measured by two internationally respected indices of economic freedom. This progress may have occurred over the past 15 years, but it is largely the result of a much longer-term effort to put good ideas on the policy agenda and educate voters and politicians about their wisdom.
Independence Day is an opportunity to celebrate our state becoming more economically free but also to reflect on the fragility of our progress. High-profile calls to significantly increase income taxes, more than double the minimum wage, repeal right to work and reverse Act 10 to allow much greater government spending would all make the state less free and prosperous if pursued.
With the ebb and flow of politics, economic freedom has periods of advancement and periods of retreat. The role of the Badger Institute in our state’s civic life is to consistently explain what economic freedom is and why it matters in any season, even when electoral incentives cause political parties to pursue other aims. On this 250th Independence Day, Wisconsinites can celebrate our country’s long-running liberty but also our state’s progress over the last 15 years — never forgetting the fragility of each.
Ben Eisen is vice president of research and policy for the Badger Institute.
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