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When Gathering for Holiday Feasts, Offer a Toast to Economic Freedom
Throughout the holiday season, people across the world gather with family and friends around tables of abundant foods to celebrate. Traditional fare like that enjoyed by the Cratchits in Charles Dickens’ A Christmas Carol has been augmented by a cornucopia of flavors and diverse treats that would have been unthinkable even a half a century ago. Today’s Christmas feast is both abundant and diverse – from mouth-watering lamb, honey-glazed hams and sausages to steaming baguettes, fried dumplings, ravioli, Swiss chocolate mousse and cannoli, there are an abundance of choices!
As we reflect upon the evolving food choices for traditional holiday meals, we might consider the conditions that make prosperity possible — economic freedom. Economic freedom supports innovation and free trade, making food more affordable and more plentiful. Over the past few centuries, the world has trended toward greater economic freedom and as a result, the rates of undernourishment have decreased while the population has greatly expanded. There is significantly more food available to the average person today than there was one hundred years ago.
Innovation Increased Food Production:
Economic freedom exposes people to new products and in doing so, fosters creativity and innovation in bringing these products to our tables at an affordable price. It not only spawns curiosity and creativity, economic freedom also provides greater access to labor, machines and raw materials, lowering the cost of starting a business and encouraging healthy competition. This kind of innovation improves efficiency, increases production and, subsequently, lowers prices to consumers.
The seed drill is an example of technological innovation that transformed farming by increasing food production and lowered food prices. Prior to the technology, farmers planted seed by hand — a method that lacked precision and wasted seeds. The seed drill allowed for efficient, even distribution of seeds. As a result, more seed could be planted in less time and evenly dispersed so that soil was not wasted and plants wouldn’t have to compete for nutrients. These improvements translated into greater crop yields and, therefore, lower prices. And additional innovation has continued to improve efficiency and increase the agricultural output.
Free Trade Has Brought More Food to More People:
Trade is the voluntary exchange of goods or services between parties. The ability to explore opportunities to trade exposes us to the goods produced by others as well as their production methods, motivating adoption of new, better ways to improve human well-being. When parties are free to trade, people benefit from access to greater quantity and choice. Furthermore, increased competition made possible by trade also drives the price of goods down.
“Free trade” simply means the absence of obstacles to exchange that take away value from both parties like tariffs and currency manipulation. Those countries that strive to eliminate barriers to free trade enjoy more options, greater quantities and lower prices of goods. But how does this work?
Free trade allows people to specialize in goods or services that they produce most efficiently relative to others. The result is often more products at lower prices!
For example, Bob grows apples but wants an orange; Sarah grows oranges but wants an apple. So, Bob and Sarah trade their respective fruits and both come away having gained from the transaction without having to grow both types of fruit. By focusing on growing just one product, Bob and Sarah will produce more of each because they can dedicate all of their land and labor to growing that one type of fruit. Again, this aspect of free trade leads to greater supply and lower prices.
Economic freedom fosters a wellspring of innovation and free trade; with innovation and free trade comes more competition, better products, and as a result more variety and choice. So as we reflect on this joyful season, let’s be thankful not only for what is on our table, but also for the economic freedom that helps make our abundance possible.