Question

How/why does economic freedom trump political freedom? How can economic freedom lead to political freedom?

Answer 1

Economic freedom refers to the ability of the members of a society to make economic decisions freely. It can also be defined as the freedom to prosper within a country without any intervention of the government or the economic authorities. Individuals are free to secure and protect his/her human resources, labor and other private property.

Economic growth is closely related to economic freedom, even if the country enjoys a little economic freedom. Increasing the levels of the economic freedom leads to higher per capita GDP growth rates.

The growth rate of the US economy was 1.9 percent in the last quarter of 2016. This was due to downturn in exports, an acceleration in imports, a fall in federal government's expenditure.

It is lower than the growth rates of other countries, especially when compared with the developing countries primarily because of the base effect. The size of the real GDP in US is much higher than the other countries' real GDP and hence the lower growth rate.