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Economic Freedom, Entrepreneurship, & Prosperity

This article explores the role of economic freedom, entrepreneurship, and policies in determining a country's prosperity. By examining examples from diverse countries, it highlights the importance of decentralized entrepreneurship and the impact of policies on economic growth. The article also discusses the concept of creative destruction and the role of the profit and loss system in directing economic progress.

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Economic Freedom, Entrepreneurship, & Prosperity

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  1. Economic Freedom, Entrepreneurship, & Prosperity Russell S. Sobel, Ph.D. Professor of Economics and Entrepreneurship Baker School of Business The Citadel

  2. What Explains Prosperity?

  3. Adam Smith’s Question:Why Are Some Countries Rich and Others Poor? An Inquiry into the Nature and Causes of the Wealth of Nations (1776) • Policies and the system of economic organization (e.g., capitalism) matter more than things such as resources, geography, education, democracy, etc.

  4. Rankings of Reliance on Capitalism

  5. Growth is a function of “inputs” AND “institutions” Spending to increase “inputs” won’t work unless the “oven” is turned on

  6. Route 50

  7. North Korea vs. South Korea Per Capita Income = $1,800 Per Capita Income = $37,900

  8. A Quick Tour of The World As we go through these, ask yourself are these people entrepreneurial? Is it the people or the policies that are the problem?

  9. Map of Economic Freedom

  10. Example 1 • A Country with VERY LOW Economic Freedom

  11. Zimbabwe (in Africa)

  12. Families in Zimbabwe

  13. Families in Zimbabwe

  14. Example 2 • A Country with LOW Economic Freedom

  15. Romania (in Europe)

  16. Families in Romania

  17. Families in Romania

  18. Families in Romania

  19. Families in Romania

  20. Families in Romania

  21. Families in Romania

  22. Example 3 • A Country with MEDIUM Economic Freedom

  23. India (in Asia)

  24. Families in India

  25. Families in India

  26. Example 4 • Another Country with Medium Economic Freedom

  27. Mexico (in North America)

  28. Families in Mexico

  29. Families in Mexico

  30. Example 5 • A Country with HIGH Economic Freedom

  31. Hong Kong (in Asia)

  32. Families in Hong Kong

  33. Families in Hong Kong

  34. Families in Hong Kong

  35. Example 6 • Another Country with HIGH Economic Freedom

  36. United States (in North America)

  37. United States

  38. The Role of the Entrepreneur • Decentralized entrepreneurship is the main reason why capitalism generates progress and prosperity • Entrepreneurs keep inventing new things that improve our way of life

  39. Percent of homes with Heating & Air Conditioning 1956 = 6% 2016 = 89% Percent of homes with only one bathroom 1956 = 71% 2016 = 7% Our Homes

  40. And They are Better: Our Showers

  41. Our Cars • Features added such as Air Bags, Air Conditioning, DVD players, Accident Avoidance, Automatic Parking 2016

  42. Our Phones

  43. Our Entertainment

  44. Our Science

  45. Our Computers MacBook Air Least expensive-13-inch, 128GB, $850.00 Most expensive- 13-inch, 256GB, $1,299.00

  46. Our Video Games

  47. From Pong to Rock Band

  48. Our Medicine U.S. Life Expectancy has risen from 48 in 1900 to 76 today

  49. Creative Destruction An economy undergoes continuous change – some industries fail, others are born Capitalism critically relies on the profit and loss system to direct this process This process cannot be centrally planned- it must be discovered within the marketplace

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