A Blueprint for Freedom: The Classical Liberal Path to Prosperity

From the dawn of civilization, societies have wrestled with the balance between order and liberty. Nations rise and fall based on how they manage power—whether through the centralized control of empires or the dispersed authority of free markets and individual rights.

The United States was founded on the radical idea that the government exists to secure the rights given by God, not to grant them. Yet, over time, this vision has been eroded by expanding bureaucracies, redistributive policies, and an entrenched political class that prioritizes power over principle. 

If the government is to be restored to its rightful place—serving rather than ruling—the federal, state, and local levels must be fundamentally restructured to prioritize liberty, responsibility, and human flourishing.

Milton Friedman argued that the government’s role should be limited to protecting life, liberty, and property—everything else is best left to markets and voluntary institutions. His work in Capitalism and Freedom laid out the case for a minimalist government that fosters an environment where individuals can pursue their own goals without interference. He warned that economic freedom is a prerequisite for political freedom—once the government takes control of the economy, it inevitably extends its reach into personal and political liberties.

Despite these warnings, the federal government has far exceeded its constitutional limits. 

Originally designed to be a government of enumerated powers, it now dictates everything from how businesses operate to how education is administered. The centralization of power has eroded the economic dynamism that made America prosperous. 

Friedrich Hayek’s The Road to Serfdom warned that government planning inevitably leads to the loss of individual choice and freedom, even when implemented with good intentions. The only legitimate functions of the federal government are national defense, securing contracts and property rights, and ensuring a basic rule of law. Everything else belongs to states, local communities, and, most importantly, individuals.

A significant part of the government’s failure lies in its incentives, as explained by James Buchanan’s public choice theory. Buchanan shattered the myth that politicians are selfless public servants acting in the best interest of the people. 

Instead, he demonstrated that they behave like everyone else—acting in their self-interest, seeking re-election, and rewarding special interests that fund their campaigns. The bureaucratic class, in turn, benefits from expanding government power, creating an entrenched system that resists reform. This cycle of political self-preservation explains why spending continues to rise, why debt is out of control, and why special interest groups dominate policy.

This dynamic is evident in the way government welfare programs have expanded beyond their original purpose. Social welfare, which once relied on private charity, churches, and mutual aid societies, has been taken over by bureaucratic institutions that dehumanize and entrench dependency. 

Thomas Sowell, in Wealth, Poverty, and Politics, demonstrated that government intervention in welfare does more harm than good by disincentivizing work and weakening community responsibility. Politicians promise more benefits, knowing that dependency creates a voting bloc that ensures their re-election. Private charities and churches, by contrast, offer not just financial assistance but also moral and social support that helps individuals regain independence.

Taxation must be simplified and made transparent. The current system punishes productivity and distorts economic incentives by taxing income multiple times—when it is earned, invested, and transferred through inheritance. This system is inherently unjust, rewarding those who manipulate loopholes while burdening those who work hard and invest wisely. Friedman’s idea of a flat consumption tax remains the best alternative—taxing only final consumption rather than punishing savings and investment. Such a system would eliminate the IRS’s complexity, remove political favoritism in tax policy, and make taxation more transparent.

Perhaps the most insidious form of government control is its manipulation of money itself. The Federal Reserve was created to stabilize the economy but has instead fostered cycles of boom and bust through artificial credit expansion and reckless monetary policy. 

Larry White, an expert on free banking, has demonstrated that historically, competitive banking systems without central banks have led to more stable monetary environments than centrally controlled fiat currencies. Inflation, as Friedman showed, is always and everywhere a monetary phenomenon—caused not by businesses or consumers but by governments expanding the money supply. 

A sound monetary system cannot be centrally planned but must be rooted in free banking, where private institutions compete to issue currency backed by tangible assets like gold and silver. Honest money holds the government accountable by preventing it from printing its way out of fiscal irresponsibility.

Federal regulations, another tool of government overreach, distort markets and restrict innovation. Free enterprise thrives when individuals are left to trade and produce without bureaucratic interference. Most regulations do not protect consumers but instead shield politically connected industries from competition. Licensing laws are particularly harmful, creating barriers to entry that disproportionately hurt lower-income workers who cannot afford costly training requirements.

Peter Boettke’s work in Austrian economics emphasizes that regulations are often the result of rent-seeking behavior—where established businesses use the government to protect themselves from competition rather than improve their products and services. A free society relies on contract enforcement and liability law rather than preemptive government intervention.

While federal overreach is the most visible threat to liberty, state and local governments also play a crucial role in either preserving or eroding freedom. 

States should serve as laboratories of competition, yet many have replicated Washington’s worst policies, imposing high taxes, burdensome regulations, and reckless spending. The proper role of the state government is to protect property rights, provide basic infrastructure, and maintain law and order with minimal interference in economic affairs. Spending should be strictly limited, tied to a max of population growth and inflation to prevent gradual government expansion.

At the local level, one of the most damaging taxes is the property tax, which effectively means no one can truly own a home outright. While states do not generally impose property taxes, local governments rely on them heavily due to excessive spending. Hayek emphasized that secure property rights are essential for economic stability and individual freedom. 

Homeownership should be a cornerstone of financial independence, yet property taxes function as an unrelenting rent paid to the government, making true ownership impossible. Local governments should phase out property taxes by capping spending and shifting to user-based fees where appropriate. This requires reining in school district spending, municipal pension costs, and bloated local bureaucracies that drive property taxes higher year after year.

Education policy is another area where state and local governments have failed to uphold individual rights. The government monopoly on schooling has led to declining quality, ideological indoctrination, and bureaucratic inefficiency. The only way to ensure quality education is through choice, where funding follows students rather than propping up failing systems. 

Sowell’s research on education highlights how competition among schools improves performance while centralized control fosters mediocrity. Universal education savings accounts would allow parents to select the best option for their children, whether it be public, private, charter, or homeschool.

The ultimate goal of governance should be to create an environment where people are free to make their own choices and take responsibility for their own lives. Human nature is deeply flawed, and no government can create a utopia. But history has shown that the freest societies are the most prosperous and that prosperity is not just material but moral. 

Sowell reminds us that cultures emphasizing personal responsibility and entrepreneurship outperform those that rely on government intervention. Societies thrive when individuals are allowed to exercise personal responsibility, build strong families, and engage in voluntary cooperation rather than coerced redistribution.

This vision is rooted not just in economic theory but in theology, psychology, and law. 

Theologically, human dignity is best preserved when individuals are free to act as moral agents rather than subjects of the state. Psychology teaches that people thrive when they have autonomy and purpose rather than dependence and entitlement. The rule of law, as articulated in the Western legal tradition, affirms that justice requires equal application rather than arbitrary government decree.

A truly free society does not require a powerful state but rather the opposite: a government so restrained that individuals, families, and communities can flourish without interference. The path to prosperity lies not in central planning but in individual liberty, responsibility, and the voluntary cooperation that has always driven progress. The task is not to reinvent government but to restore it to its rightful place—limited, accountable, and subservient to the people. 

Only then can we truly let people prosper.

Vance Ginn, Ph.D., is president of Ginn Economic Consulting, host of the Let People Prosper Show, and previously chief economist of the Trump White House’s OMB. Follow him on X.com at @VanceGinn.