Breakdown by Nation
Classical Economic Principles
The most important ideas in economics emerged more than two centuries ago. What makes these ideas classical is not the era they came from, but their very nature. They are classical principles because they are so basic, and so fundamental, they are timeless.
Liberty and freedom form the basis for classical economic principles. When individuals and markets are free from onerous and capricious government intervention, individuals prosper. And, when individuals prosper, nations prosper.
What Are Classical Principles?
The field of economics can be broken down to be understood quite simply. The main challenge of economics is to find a way to produce the things that people want in the most efficient way possible. Fortunately, economists solved this challenge over 200 years ago. At that time, the classical economists argued that people will naturally produce the things that others want, in the most efficient way possible, so long as they have the right environment. That environment consists of only four things; low taxes, free markets, protection of private property and a stable price environment. Over the past two centuries, whenever economic policies in any country have moved in the direction of lower taxes, freer markets, greater protection of private property and lower inflation, people have prospered. Whenever policies have moved away from these principles, economic trends have been disappointing.
There is a widespread belief that spending by the federal government stimulates spending in the rest of the economy. Dr. G’s research on the impact of federal spending shows the opposite tends to be true. Rapid growth in federal spending tends to weaken the private sector and hence weaken the economy. Read more below on different components and trends of the economy.