How Can We Make America More Competitive?

Although it is known as “the land of opportunity,” America has experienced several economic downturns since its founding; the most recent of these was the Great Recession, which began in late 2007. As the nation continues to cope with the reverberations still emanating from this crisis, many are asking, “What can we do to regain our competitive edge in the world?”

Some people suggest that a renewed commitment to education will safeguard future generations from calamity, while others claim that focused investments in certain technologies will help America by giving it a strong foothold in world markets. Still others advocate the outdated Keynesian notion of increasing government spending in an attempt to boost the economy.

While it’s always a good idea to invest in education and new technologies, these actions alone won’t solve our problems. In the end, the only real way to encourage economic growth and keep our country competitive is to strengthen free enterprise by reducing government regulations and giving businesses the freedom to grow.

What is free enterprise?

A core tenet of American economics, free enterprise has provided unprecedented opportunity and prosperity for generations of citizens. This system, and its promise of a better life, is what has drawn immigrants to our shores since our nation’s founding.

Friedrich Hayek

Friedrich Hayek

At its core, free enterprise is simply an economic system that is run by individuals, not the state. In a capitalist free-enterprise, or free-market, society, people individually decide which products and services to make and buy. Individuals and businesses voluntarily enter into contracts, and competitive bidding determines market prices. According to economist Friedrich Hayek, free-enterprise systems are examples of “spontaneous order,” which means that any planning or regulation involved in such a system arises naturally from the experiences and knowledge of the people actually involved, not from bureaucrats.

How does free enterprise make America more competitive?

Economic freedom leads to a variety of positive outcomes, both on an economic and a societal level. The following are only a few of these advantages:

It encourages personal freedom—Free enterprise empowers individuals, giving them responsibility for their own success. This encourages self-reliance, generates motivation, and promotes dignity. It also inspires people to test their limits and work harder to raise their standard of living.

It spreads prosperity—When business owners do well, they tend to reinvest in their companies to maintain or spur further growth. This creates new jobs and new opportunities for a number of people. Successful businesses also support their communities by donating money to charities, offering retirement and health care benefits, and growing the tax base that funds government services.

It stimulates competition—Businesses that want to win customers must continually search for ways to stand out in the market. Therefore, they will experiment with new technologies and ways of doing business to improve their customers’ lives.

It stabilizes governments—Individuals who have a sense of ownership over their lives and businesses will naturally want to protect what they have built. Hence, they will be more engaged in their local and national governments.

How does government suppress free enterprise?

“The competitive free enterprise system has given us the greatest standard of living in the world, produced generation after generation of technical wizards who consistently lead the world in invention and innovation, and has provided unlimited opportunities enabling industrious Americans from the most humble of backgrounds to climb to the top of the ladder of success.” 

– President Ronald Reagan

Even though free enterprise offers all of these benefits, some people think that we could improve our society by giving government a larger role in our lives and economy. However, nothing could be further from the truth. It is the private sector, not the government, that creates opportunity and drives innovation. Ideally, the role of government in increasing America’s competitiveness is to get out of the way of business—not micromanage it.

Government regulations and burdensome taxes not only stifle growth and reduce personal responsibility, but they also spawn expansive bureaucracies, which raise costs and lower efficiency. For example, the 2010 Dodd-Frank Act, which regulates the financial industry, has led to an estimated $24 billion in compliance costs. It has also created an astounding 61 million hours of paperwork for industry workers as of 2016.

Last year, the Small Business Administration put the annual price of federal regulations at $10,585 per employee for a business with fewer than 20 employees. Most businesses, especially small businesses, cannot hope to compete while burdened with regulatory costs of this magnitude.

Our current corporate tax rate also keeps US businesses from being competitive with the rest of the world. At 35 percent, it is the highest rate among all developed nations. This has led to companies leaving America for more tax-friendly locations. It has also prevented multinational companies from coming to our shores. Less than 60 years ago, 17 of the 20 biggest global firms maintained headquarters here. Today, only six remain.

One can see the inverse relationship between government interference and economic growth in the Heritage Foundation’s Index of Economic Freedom, which rates the freedom of economies across the world. On this year’s list, America came in at number 17, its lowest ranking ever.

For most of our nation’s history, government’s burden on society—at less than 10 percent of GDP—reflected the founders’ vision of a limited government. To remove the restraints of overregulation and taxation, and return to the level of competitiveness we once enjoyed, we need to work harder to reduce the size and scope of government.

Spotlight – Are College Campuses Killing Free Speech?

Are College Campuses Killing Free Speech

Are College Campuses Killing Free Speech

College and university campuses, more so than any other of our institutions, are supposed to value the free and open exchange of ideas. In fact, their sole purpose is to pursue and disseminate knowledge. After all, how can students fully understand a subject if they never encounter multiple perspectives on the issue?

Indeed, far from sheltering young people from challenging or disturbing concepts, the goal of higher education is to expose them to differing opinions and ideas. That way, they may learn to wrestle with opposing views and ultimately make an informed decision on any issue. This process leads not only to personal and intellectual growth, but also to societal growth, as the political health of our nation depends on an informed citizenry.

George Washington, reflecting on the importance of higher education in a democracy, told Congress that “There is nothing which can better deserve your patronage than the promotion of Science and Literature.” He believed that acquiring knowledge was the “surest basis of public happiness,” and wrote to fellow founder John Adams, suggesting that a “national University in this country is a thing to be desired.”

However, over the last few decades, American institutions of higher learning have failed to live up to the trust our founders placed in them. Most egregiously, they have increasingly infringed upon the 1st Amendment, suppressing the speech of students and faculty alike and stifling the exchange of information and ideas. Read on to learn about the foundations of this movement and what we can do to stop it.

The history of the anti-free speech movement

Starting in the 1980s, college and university faculty and administrators began transforming campuses to make them more “politically correct.” This involved replacing the historical cannon with more multicultural authors and establishing speech codes to protect women and minorities from “hate speech.”

Around the same time, the self-esteem movement, which directed parents and educators to shower children with lavish, unconditional praise, became the rage in K-8 classrooms. This well-intentioned, but often misapplied, educational philosophy led adults to protect students’ fragile self-esteem by sheltering them from all forms of criticism or adverse consequences. Consequently, many young people began to expect educational institutions to safeguard their feelings.

Not being able to naturally develop an authentic sense of self-esteem, young people sought out external sources of validation. One popular way for students to affirm their identities was to become affiliated with a larger group, which resulted in the growth of identity politics across college campuses nationwide. As a result, being part of a victim class became something to aspire to, a way of gaining the moral high ground in any argument.

Sociologists Jason Manning and Bradley Campbell define this “victimhood culture” as follows:

“A culture of victimhood is one characterized by concern with status and sensitivity to slight combined with a heavy reliance on third parties. People are intolerant of insults, even if unintentional, and react by bringing them to the attention of authorities or to the public at large. Domination is the main form of deviance, and victimization a way of attracting sympathy, so rather than emphasize either their strength or inner worth, the aggrieved emphasize their oppression and social marginalization.”

Combined, these societal changes have led to a climate of fear and intimidation on college and university campuses, with students and faculty hesitant to voice their opinions for fear of being denounced as “hateful.” The news in the past few years is full of stories about individuals being shouted down, having their invitations to speak rescinded, and even being physically assaulted for having a differing opinion about an emotionally charged topic.

The free-speech climate on campuses today

The free-speech climate on campuses today

The free-speech climate on campuses today

Incidents like these – as well as the demand for “trigger warnings,” the war against “micro-aggressions,” and so on – reveal how far down the Orwellian road the university system has traveled. People are now demanding conformity as a way to foster diversity and, ironically, excluding those who may have a different idea of inclusivity. In attempting to make campuses a “safe space,” many students, teachers, and administrators are actually making campuses dangerous for people whose viewpoints differ from the campus’ majority opinion.

The 1st Amendment is no longer considered sacrosanct on our colleges and universities. According to a 2016 Gallup poll, fully two-thirds of college-aged respondents thought that colleges should be able to restrict racial slurs and language designed to offend certain groups.

Roughly the same percentage believe that colleges have the right to control whether students can wear politically insensitive costumes. Thus, it is not surprising that all across America, campuses are instituting strict speech codes, designating certain areas as “free-speech zones,” and defunding student-run periodicals that publish materials deemed to be in any way “offensive.”

Some academics have even explicitly decried the notion of free speech. After the 2012 Benghazi attack, university professors Anthea Butler and Eric Posner stated that Americans place too high a value on free speech. Posner added that our nation’s resistance to curbing free speech in deference to foreign policy interests was a “bizarre principle.” In The Los Angeles Times, Northwestern University professor Laura Beth Nielsen argued that hate speech should be restricted because “Racist hate speech has been linked to cigarette smoking, high blood pressure, anxiety, depression and post-traumatic stress disorder, and requires complex coping strategies.”

In 2015, a Yale lecturer resigned after being publicly castigated for questioning whether it was healthy for students to give up their free-speech rights in order to protect others’ feelings. Her “crime” involved writing an e-mail in response to the university’s strongly-worded “suggestion” that students should avoid culturally insensitive Halloween costumes. She wrote: “I wonder, and I am not trying to be provocative: Is there no room anymore for a child or young person to be a little bit obnoxious, a little bit inappropriate or provocative or, yes, offensive?”

Her words resonate well beyond her specific situation. They not only speak to the suppression of free speech on college campuses, but they also give rise to alarming questions about modern society and why our students are eagerly adopting these authoritarian attitudes.

The future of free speech on campus

The good news is that people are starting to notice how far anti-free-speech activists have gone in their efforts to suppress speech with which they disagree. After a number of violent student demonstrations and protests in 2016, the University of Chicago’s dean of students sent incoming students a letter that spelled out the school’s dedication to academic freedom and warned them not to expect “safe spaces,” trigger warnings, or censorship.

Students are also finding ways to regain their right to free expression. Earlier this year, several dozen young people from nearly 20 colleges met at the University of Chicago to initiate a nation-wide campus free-speech movement. With a goal of protecting all forms of speech – even potentially offensive speech – the students released a proclamation that they hope other students will sign and live by.

Additionally, organizations like the Foundation for Individual Rights in Education (FIRE) have been formed to protect the rights of students. The nonpartisan group has filed numerous law suits on behalf of students whose rights have been infringed since its inception in 1999. With the help of this group and others like it, we can turn back the tide of illiberalism and help institutions of higher education develop truly informed citizens, who are capable of intelligent governance.