3. The free market reduces unemployment
Economic freedom has also been found to increase employment. According to the authors of research from the Federal Reserve, “We find that states with greater economic freedom – defined as the protection of private property and private markets operating with minimal government interference – experienced greater rates of employment growth.” The examination of the relationship between economic freedom and employment using international data has come to similar conclusions.
While governments will use unemployment as justification for taking more taxes to fund work programs and unemployment benefits, the research shows that free market activity is actually the best way to address this problem. If we want to put people back to work, we need the government to get out of the way. Artificial government programs intended to reduce unemployment only provide a temporary relief, and don’t solve the bigger issue of economic recovery and growth. Only the private enterprise can fill those holes.