There is a persistent myth that democracy and personal freedom are necessary to produce economic growth, and that the USA will somehow retain its economic dominance solely because of our relative degree of personal freedom. (This myth is most commonly known as ‘The Power of American Ingenuity.’)

I don’t believe this is the case. Left to themselves, people decide at some point that free time and their own sports, hobbies, or other non-productive pursuits are worth more to them than an extra quarter point of GDP.

However, if the governing class restricts personal freedom sufficiently, then economic success is the only personal freedom left, and people will pursue it because it’s all they have. This is why countries like China and Singapore actively restrict personal freedom: it’s actually counterproductive to the goal of boundless exponential economic growth to let people enjoy themselves.

If the environment is sufficiently polluted and destroyed, people won’t want to do unproductive things like go outside. If people have no freedom to act politically, they won’t waste time on unproductive pursuits like political activism. If people have no freedom to do anything but work and shop until they die of environmentally-caused cancer, they’ll work and shop, maximizing GDP, and require expensive cancer treatment, maximizing GDP and minimizing that awkward unproductive time between retirement and death.

Countries like China and Singapore have broken the illusion that personal freedom is necessary for economic success. (And, therefore, political success—having the best technology and the most surplus economic capacity to have the biggest, best-armed military in the world is what has made the USA dominant in world politics.)

This blog post summarizes a Robert Barro essay that appears to corroborate my thesis: the rule of law is most important for economic growth, regardless of personal freedom. Democracy is a much smaller determinant…and it turns out that too much democracy is just as detrimental to economic growth as too little.

This leaves us with a question:

If personal freedom is not the most efficient way to achieve economic success—and personal freedom is more important to us than the final increment of economic success that losing some of our freedom brings—then how do we maintain independence against more efficient entities?

(We see a practical application of this problem every time a happy, peaceful native tribe is slaughtered or dispossessed in order to drill for oil or mine for metal. The tribe members are much happier than the mine workers who replace them—or even the mining company owners—but they are helpless to prevent their own slaughter.)