The annual Forbes list of billionaires is making news, and I’m waiting for the Left to begin the usual chorus about “income inequality” and how it’s not “fair” that these people are so wealthy. Here’s hoping we’ll be spared that nonsense. What I find really interesting about this year’s list are these facts:
Last year, I conducted a literature survey of all recent studies published in academic or professional journals that examined the relationship between government policies and state economic performance. From 1992 to 2013, there were 31 studies of economic freedom indexes. In 24 of them (77 percent), higher economic-freedom scores were associated with higher economic performance after adjusting for other factors. In the remaining seven studies, there was no statistically significant relationship. Not a single study found that higher economic freedom — which primarily means lower taxes, spending, and regulatory burdens — was statistically associated with lower economic growth.
A 2012 paper in the International Journal of Economics and Finance, for example, found that states with higher economic freedom tend to attract higher levels of investment from foreign firms, which then leads to more economic growth. A 2007 study in the Southern Economic Journalfound that states attract another form of valuable capital, people, to the extent they embrace economic freedom.