Reopen the Economy, More Open Than Ever

For Western democracies to flourish, they must first reject statism as the model for post-Covid governance

By Anders Fogh Rasmussen. Mr. Rasmussen served as prime minister of Denmark (2001-09). Excerpts:

"Friedrich Hayek published “The Road to Serfdom” in 1944, but it should be essential reading for all Western leaders today."

"as Western countries emerge from the first wave of Covid-19 infections, governments must turn their focus to a new objective of turbocharging the economy and restoring more freedom than they’ve taken."

"Leaders should heed Ronald Reagan’s warning: “The nine most terrifying words in the English language are: I’m from the government, and I’m here to help.”"

"What should governments do to stimulate growth? It will depend on each national circumstance, but finding ways to restore confidence in the productive part of the economy is key. Confidence flows from concerted action: Make it possible to start a business immediately and with no capital so an unemployed person who spots an opportunity can exploit it. Cut red tape for entrepreneurs or give payment holidays from taxation or Social Security contributions. Make it cheaper to hire employees and find ways to facilitate borrowing using property as collateral. Open borders for safe travel that can stimulate exports and tourism.

Governments should also understand that to boost the economy, their job should be to do less. People and businesses are disposed to trade with each other; governments often stand in the way. We need an end to costly trade wars. Leaders should signal to businesses that global trade has a bright future, not least because Covid-19 has been a sugar rush for digitization."

"Don’t overlook the longer-term benefits of restoring freedom. Freedom is not only good economics, but also smart geopolitics. If you overlay the Heritage Foundation’s Index of Economic Freedom with the Global Health Security Index, there is a strong correlation between a country’s freedom and its ability to prevent, detect and respond to infectious-disease threats. Freedom leads to innovation, which creates wealth and opportunity for all, and saves lives. Leaders have forgotten this, to citizens’ collective peril."