Reviving Capitalism: Lessons from the Near-Death and Rebirth of American Railroads

Free market capitalism, the system that has made possible the prosperity we enjoy today, has been in retreat over the last century. Government’s share of U.S.GDP has continued to grow—save for a few interruptions—while the regulatory burden on businesses has steadily expanded. In 1890, total government spending accounted for about 6 percent of the U.S. economy. Today, that figure is almost 34 percent—approximately $6 trillion total at the federal, state, and local levels—with another $1.88 trillion in regulatory compliance costs. The result is widespread popular support for top-down government regulation of the economy. To push back against, and even reverse this trend, business leaders need to gain the societal legitimacy needed to fend off political predation. In short, continued success in the marketplace increasingly requires successful promotion of economic freedom in the public policy arena.

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