Reminder: Why the Economy Matters

During this election cycle, it has become clear that Americans are more divided than at any other time in recent memory. Those who identify as Democrats are moving increasingly further to the left, as demonstrated by the unprecedented rise of a self-described socialist in the Democratic Party primaries. The Republicans are growing divided among themselves, as evidenced by the selection of an anti-free trade candidate to represent the party in the presidential election.

In this time of wildly competing views on social and economic ideas, it is vital for the citizens of our democracy to find common ground, especially because such ground does exist.

Whether you are pro-life or pro-choice, support deportation of illegal immigrants or believe in amnesty, deny or accept the perils of global warming, everyone can agree on one thing: the quality of life enjoyed by the electorate matters, arguably far more than any other measure.

For example, if you live in a country with a poor quality of life for the general population, odds are that you will not be as concerned about other issues. When you and your neighbors live in abject poverty with an unstable government, you will probably not be too concerned with animal rights or global warming—not because you do not care about animals or the health of the planet, but because you have more immediate problems to worry about (such as your own health and well-being).

The most important factor for increasing the quality of life for a population is to improve the economic health of the country. As the graph by the OECD Better Life Index illustrates, the general quality of life (measured as a Better Life Index score from 0-9.00) correlates closely with the GDP per capita (how much the economic output of the nation is per one person).

Source: OECD Better Life Index

Although there are a handful of other factors that contribute to the general quality of life score, the evidence based on similar studies speaks for itself: to improve the well being (or quality of life), of the citizens in a country, its leaders must first enact policies that drive economic growth.

Other important metrics that are related to the quality of life mirror the graph above, such as life expectancy.

As the graph above shows, the GDP per capita correlates closely with the life expectancy among U.S. citizens. In an era of declining economic growth, it is a great concern that if economic productivity is to tumble, then so will our own life expectancies.

When both of the major party candidates for President are either competing as to who can be tougher on the financial services industry, or individually support tax increases and new barriers to free trade, the voter should be informed of the economic consequences of such policies.

These policies are not just abstract matters that only have an effect on other people, but may have detrimental, long-lasting consequences on everyone’s lives, and most certainly on yours.

Henri Mattila is a co-founder at Merion West. He is currently an undergraduate at Cornell University where he studies applied economics and management. Henri was born in Helsinki, Finland and is an army reservist there. In addition to business development for Merion West, he enjoys writing about new businesses and topical political issues. You can contact him at henri@merionwest.com.

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