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How the United States become prosperous

AT a time when many Americans question the future of their country, Guy Sorman, author of "Economics Does Not Lie: A Defense of the Free Market in a Time of Crisis" and a contributing editor to City Journal, offers this:

"Worry over America's recent economic stagnation, however justified, shouldn't obscure the fact that the American economy remains Number One in the world," Sorman wrote.

"The United States holds 4.5 percent of the world's population but produces a staggering 22 percent of the world's output - a fraction that has remained fairly stable for two decades, despite growing competition from emerging countries."

It remains the world's largest economy, with a gross domestic product twice that of China.

In a piece than ran in The Wall Street Journal under the headline "A Brief History of American Prosperity, Sorman reviewed the building blocks of prosperity:

 

  • Strong intellectual property rights, the patent system that rewards innovation
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  • Mobility
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  • Democracy itself, which led to the development of a mass market, which led to mass production
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  • Immigration, the attraction of self-selected risk-takers and innovators, and the resulting
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  • Dynamic culture
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  • The rule of law
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  • Free-market competition
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  • Lower rates of taxation
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  • Economic dynamism - the understanding that outmoded activities and technologies should be allowed to fade so innovation and growth can occur, and so on.
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    "America's economic might is rooted in an entrepreneurial culture and a passion for innovation and risk-taking, traits nourished by the nation's commitment to the rule of law, property rights, and a predictable set of tax and regulatory policies," Sorman wrote.

    "Policymakers have lost sight of these fundamental principles in recent years. The next era of American prosperity will be hastened when they return to them."

    Many Americans couldn't agree more.


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