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Economy

 

The Issue

The core mission of The Heartland Institute is to discover, develop, and promote free-market solutions to social and economic problems. But what is the free market, and how does a free market promote a more vibrant economy?

The free market, simply put is an economic system where the prices for goods and services are determined by interactions within the open market by consumers and the forces of supply and demand free of external control or manipulation.

The free market promotes cooperation through rational self-interest, an idea that Adam Smith referred to as the “invisible hand,” giving every person the opportunity to improve their own lives. Milton Friedman, one of the great economic minds of the 20th century argued “The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.”

A free and open economy is essential to a free society. “The peaceful market competition of producers and suppliers is a profoundly cooperative process in which everyone benefits and where everyone’s living standard flourishes (compared with what it would be in an unfree society),” wrote economist Murray Rothbard in The Concise Encyclopedia of Economics.

The opposite of a free market economy is one dominated by government control, subsidies and regulations. Rothbard once correctly observed in his book Man, Economy, and State that government regulations and subsidies “promote inefficiency in production and efficiency in coercion and subservience, while penalizing efficiency in production and inefficiency in predation.”

While no true free market exists today, the principles of open competition, low taxation and limited government interference in the open market serve as the bedrock of the American economy. The United States has embraced these principles and has not only seen unprecedented growth in our economy, but widespread prosperity and peace.

Our Stance

The Heartland Institute favors public policies that reduce the size and power of government and expand choice and freedom for citizens. We oppose government programs, regulations and tax regimes that favor some at the expense of others.

Featured Subtopics

Man peering into closed door meeting
Public officials try to pick winners and avoid losers, but experience shows they seldom succeed. It is far better to leave money in taxpayers’ hands than to give it to a few politically chosen individuals and businesses in the forlorn hope they will make the best investment decisions. Lower tax rates benefit the economy as a whole.
Scales showing wealthy person and many people
Increasing taxes on the “rich” is not the way to reduce inequality. Such taxes only make it more difficult for middle-class people to earn their way to upper-income status, thereby preserving the privileged status of the rich.
Man hailing a taxicab
The rise of the peer-to-peer sharing economy has dramatically changed multiple industries ranging from Uber and Lyft for transportation to Airbnb for hotels. New technologies have empowered both the entrepreneur and consumer to undertake new business arrangements which avoid the regulations and high startup costs of traditional businesses.

Additional Subtopics

  • Economic Development: Cities
  • Economic Development: Federal
  • Economic Development: States
  • Economic Theory
  • Economic Trends
  • Entrepreneurship
  • Globalization
  • Green Jobs
  • Infrastructure
  • Trade

Videos

Title: In the Tank Podcast, Ep 294: CRISIS! Unemployment, Inflation, and Gas Prices
Description: The Heartland Institute's Donald Kendal, Jim Lakely, and Nate Myers present episode 294 of the In the Tank Podcast, recorded live at noon CT on Thursday, May 13. The ITT crew talk about America suddenly facing one crisis after another, and talk about how they could (and should) have been prevented. They tackle the unemployment crisis, where (shocker) people getting “stimulus” checks and extended unemployment benefits find sitting at home a better option than returning to work. They talk about the inflation crisis, where (shocker) the government pouring trillions of “free money” into the economy has real-world ramifications. And they talk about the gas crisis, where (shocker) the Biden administration stopping fracking and canceling the Keystone XL pipeline — as well as the Russian hack that crippled the most-important pipeline on the east coast — has a real-world effect on gas prices. Be sure to subscribe to our podcast on Youtube, Apple Podcasts, Spotify, Google Play, iHeart, and wherever you get your podcasts. SHOW NOTES: UNEMPLOYMENT CRISIS? WSJ - Millions Are Unemployed. Why Can't Companies Find Workers? https://www.wsj.com/articles/millions-are-unemployed-why-cant-companies-find-workers-11620302440 (Video) - Biden on people being paid to stay home https://www.youtube.com/watch?v=_HchWtRL0Vw Reason - The Jobs Picture is More Complex Than It Seems https://reason.com/2021/05/10/the-jobs-picture-is-more-complex-than-it-seems/ NPR - Biden: Americans Will Lose Unemployment Benefits If They Turn Down Jobs https://www.npr.org/2021/05/10/995518597/americans-will-lose-unemployment-benefits-if-they-turn-down-jobs-biden-says INFLATION CRISIS? CNBC - Inflation speeds up in April as consumer prices leap 4.2%, fastest since 2008 https://www.cnbc.com/2021/05/12/consumer-price-index-april-2021.html The Blaze - Bank of America warns of HYPERINFLATION 'at the very LEAST' https://www.theblaze.com/shows/the-glenn-beck-program/bank-of-america-hyperinflation?rebelltitem=1#rebelltitem1 GAS CRISIS? WaPo - Fuel shortages crop up in Southeast, gas prices climb after pipeline hack https://www.washingtonpost.com/business/2021/05/11/gas-shortage-colonial-pipeline/ Bloomberg - Gasoline Prices Hit $3 as Shortages Grow on Pipeline Outage https://www.bloomberg.com/news/articles/2021-05-11/gas-stations-run-dry-as-pipeline-hacking-will-take-days-to-fix

Economy Experts Team

The Heartland Institute's experts on the economy are available for legislative testimony, speaking engagements, and media interviews.

Heartland Staff Policy Experts