Washington Policy Center: What’s the state of the free market?

I was born in Britain. When I took my naturalization test to become a U.S. citizen, one of the civics questions asked was: “What is the economic system in the United States?”

The required answer was a “capitalist” or “market” economy.

Free markets are foundational to the freedom and prosperity we enjoy in America. So what is the state of the free market in America today?

In terms of public attitude, a Pew Research study in 2022 went some way to giving an answer. Only 19% of respondents thought that “capitalism” was effective at meeting basic needs such as food, health care and housing. In contrast, “socialism” was deemed effective by 37% of Americans surveyed.

Capitalism has delivered unprecedented improvements in living standards and a dramatic drop in global poverty, and yet socialism outscored it 2 to 1.

Our memories are short. Americans want to know the answer to the question asked by Janet Jackson in her 1986 pop hit, “What Have You Done for Me Lately?” It has been a long time since elated Eastern Europeans wielded sledgehammers to tear down a wall that had held them in the misery of a promised socialist paradise.

The Pew survey showed Americans less positive toward capitalism than they had been in 2019. Meanwhile, in the Heritage Foundation’s 2023 Index of Economic Freedom, the U.S. was scored at an all-time low, ranking 25th “freest” in the world after dropping seven spots in the last five years.

Are the problems we face – the high housing costs, environmental damage, and diminished education test scores – perhaps signs that we need a renewed understanding of what free markets mean and how market-based solutions can address complex policy problems?

This Thursday at the Centerplace Regional Event Center, Washington Policy Center research leads will offer their take on the “state of the free market” in key policy areas. The potential implications for Washington are significant.

For example, Gov. Jay Inslee has been identified as a “green” governor in regional and national press. He has implemented his agenda for environmental mandates of various kinds, each with a promise of results that would help heal the planet.

Todd Myers, the environment director at WPC, pointed out the governor’s own metrics for success show that state policy has repeatedly failed. The response was the scrubbing of state websites highlighting those metrics, and denial among the political and activist class. As Myers says, the problem with environmental policy is that it has become more about politics and identity than results. Myers has literally written the book (“Time to Think Small”) on how new technologies and market-based incentives can achieve success where government mandates have failed.

In the world of education, we saw the impact of the government near-monopoly during the COVID shutdowns. Even when the science showed opening the schools was safe – with the American Academy of Pediatrics recommending in June 2020 that schools reopen with safety measures in place – many Washington public schools did not fully reopen until spring 2021. The decision-making didn’t follow the science, it followed the politics.

On a national level, parents reacted. In 2019, school choice programs that offer public aid to pay for private education served only 500,000 students (less than 1%) across the U.S. Now, school choice programs have exploded in popularity, and more than 20 million students nationwide (36%) can access funds through vouchers, tax credits and education savings accounts. Here in Washington state where we pride ourselves for our innovation, reform has been blocked. What might we gain by advancing markets for educational choice?

Like so much of the rest of the state, Spokane has seen housing and rental prices skyrocket. Is the solution to this trend greater government control of pricing or is that a cure worse than the disease? And are regulations exacerbating the cost of housing right now?

These are key issues that impact how we live our lives, and what we provide for the next generation. Is the solution bigger government or more individual choice and freedom?

The State of the Free Market comes down to one word. Conveniently, that word is the name of another 1986 Janet Jackson hit, “Control.” And the degree to which government control should feature in the solutions to some of our greatest challenges is one of the fundamental questions that will be raised at WPC’s State of the Free Market event this Thursday.

Eleanor Baumgartner, of Spokane, is a volunteer for the Washington Policy Center. Members of the Cowles family, owners of The Spokesman-Review, have previously hosted fundraisers for the Washington Policy Center and sit on the organization’s board.