"According to a popular view that I call “two cheers for capitalism,” capitalism’s effect on development is ambiguous and mixed. This paper empirically investig

"According to a popular view that I call “two cheers for capitalism,” capitalism’s effect on development is ambiguous and mixed. This paper empirically investigates that view. I find that it’s wrong. Citizens in countries that became more capitalist over the last quarter century became wealthier, healthier, more educated, and politically freer. Citizens in countries that became significantly less capitalist over this period endured stagnating income, shortening life spans, smaller gains in education, and increasingly oppressive political regimes. The data unequivocally evidence capitalism’s superiority for development. Full-force cheerleading for capitalism is well deserved and three cheers are in order instead of two." source: https://doi.org/10.1007/s12115-010-9305-7 https://doi.org/10.1007/s12115-010-9305-7 Market-based reforms across the world, including in China, India, Chile, and South Korea, are credited with lifting millions out of poverty, and bringing about a profound increase in average incomes. Economist Lee Ohanian compares the labor market policies of Europe and the United States in his essay The Effect of Economic Freedom on Labor Market Efficiency and Performance. Compared to the United States, European nations have higher minimum wages, stricter rules that prevent the firing of workers, and high rates of unionization. These rules are intended to protect workers, but Ohanian finds that they discourage employment and result in lower compensation rates. His analysis indicates: >These findings have important implications for economic policy making. They indicate that policies that enhance the free and efficient operation of the labor market significantly expand opportunities and increase prosperity. Moreover, they suggest that economic policy reforms can substantially improve economic performance in countries with heavily regulated labor markets and high tax rates. source: https://www.hoover.org/research/capitalism-vs-socialism-2 https://www.hoover.org/research/capitalism-vs-socialism-2 A strong correlation is found between lower rates of government spending as a share of GDP, and the rate of economic growth: https://web.archive.org/web/20170821004405/http://ime.bg/uploads/335309_OptimalSizeOfGovernment.pdf https://web.archive.org/web/20170821004405/http://ime.bg/upl...