How to create prosperity is no secret—any government can do it. The one point plan for prosperity is freedom. Down through the ages governments that sought to constrain their citizens through higher taxation, excessive controls and regulations, and restricted freedom; have stagnated.

The Communists

Look at the Soviet Union and Communist China before they loosened their stranglehold on their citizens over the last few decades. China had become irrelevant after its revolution for the common man. Once the greatest trade nation of the east, it dwindled into obscurity as it imposed greater control over its people. So did Russia as it became the Soviet Union and acted in the name of “from each of ability to each in need.” No country in Eastern Europe was ever relevant again after WWII. The entire “eastern bloc” stagnated for decades. Only after it was liberated and allowed to be free again did people there begin to thrive. Even though it hasn’t happened over night, the people in the Soviet Union, China, and Eastern Europe, have all benefited to a great extent as their countries have been liberated and their freedoms have increased. Billions are prospering as never before.

Another case history is Cuba, whose great prosperity was stopped in its tracks when government took over the responsibility of education, health care, and social welfare. The effects of government interference are evident. It is freedom that has created prosperity and when freedom is taken away the result is stagnation or worse.

One Nation Divided

But maybe the best example of the virtue of freedom versus government control is East Germany versus West Germany which was split in two following World War II. Here a nation with the same culture, the same level of education, the same geographical resources and the same work ethic was divided into two very different political schemes.

East Germany over the decades became paralyzed as more and more decisions were handed down by the central planners of a strong central government. They received government education and industries were planned and run with the guidance of government. Taxes were levied on the rich creating a vast middle class. What was the result? Innovation ceased, prosperity was replaced by economic stagnation, and what used to take days to accomplish, began to take weeks, then months, and then years as the ability to work, produce, and profit in East Germany disappeared. Gone were free markets, and progress simply stopped.

The wealth in East Germany was redistributed in the name of equality. Chronic worker absenteeism developed, stagnation set in, and just ten years after being severed from brother and sister, aunt and uncle, the people of East Germany suffered as their relatives in the West thrived. Many tried to escape, but a wall was built to keep them in. The people of East Germany became wards of the State.

What a contrast to West Germany. Individuals prospered as they were given greater freedom after WWII to produce as they wished and keep the fruits of their labor. Controls and regulations were kept to a minimum and free markets, not government, dictated business. Despite their country having been demolished by the war, to the point that their currency became non-existent through hyper-inflation, and despite the fact that their free market had been virtually eliminated by Hitler when he took control of every aspect of the economy; something amazing happened. People called it "The German Miracle.”

In 1948 West Germany lowered tax rates, ended government controlled prices and regulations on business, and allowed the market to reassert itself. West Germany also reformed its currency laws to ensure a stable currency by law. Less than ten years after the government established its freedom oriented policies the GDP was growing at four times the rate it was in 1948. A nation literally in shambles was on its way to becoming the richest nation in Europe.

The New World

Ironically, the former nations of the eastern bloc are in better shape today than old Europe, which has stagnated under the control and regulation of government. England is an excellent example. It became the poor man of Europe as it adopted Labor government policies to equalize wealth. Having adopted many of the east’s philosophies, England is now a shadow of its former greatness after the industrial revolution when she was the greatest economic power on earth. Adam Smith taught England that freedom and free markets would lead it to prosperity. They pursued that dream and captured it. But England squandered its greatness and is now second to Germany, which is one of the only nations in Europe still clinging to its free market discipline.

Freedom works. It always has and it always will. Allow individuals to be free, insist that they be responsible, and protect them from those who would take their freedom and property through force or fraud, and society will prosper. It goes without saying that this nation has that very choice to make in this election. We can continue to stagnate or unleash the explosive power of free individuals. It is a choice that will determine the future of this country.

Today trillions of dollars sit immobilized by the present uncertainty and fear of the future.  Provide America with a clear, predictable plan of freedom along with a credible promise for fiscal and monetary stability and it will rise up to do what it has always done better than any nation on earth: innovate and produce.

That is the power of freedom.

Paul Nathan