In his recent commentary in the Financial Times, Kenneth Rogoff, a professor of economics at Harvard, made a strong case for the importance of education in heading off future crises in capitalism:
Societies need to find ways to make adult education, including economic and financial literacy, far more available and far more compelling. If voters are uninformed and easily swayed towards demagogues peddling short-term ill-considered policies, there is little hope for righting the course of capitalist economies. As someone who has spoken to all kinds of people in the wake of the financial crisis, my sense is that most citizens are starved of information, and would consume it hungrily if offered in a palatable form.… Improved education alone will not resolve the flaws inherent in today’s capitalism, but it is an essential first step down any path to a solution.
Indeed, as the 2012 Index of Economic Freedom has documented, today’s economic troubles have been neither accidental nor inevitable. The problems we face are the outcomes of politically driven and economically self-defeating policy decisions.
The Index offers a valuable starting place from which to reflect on the fundamental principles of the free-market system and the lasting value of economic freedom. As the Index demonstrates, there is a strong interplay between economic freedom and prosperity. Countries that embrace freedom have higher incomes, better growth rates, and less poverty, and they even do a better job in protecting the environment. And they do all that without resorting to coercion.
Economic freedom is not a dogmatic ideology. It represents instead a philosophy that rejects dogma and embraces diverse and even competing strategies for economic advancement.
A recurring theme of human history has been resilience and revival. As Friedrich A. Hayek once observed, “If old truths are to retain their hold on men’s minds, they must be restated in the language and concepts of successive generations.” The Heritage Foundation’s Index provides such a reminder for economic revival in the years ahead.