Last week, the United States (US) celebrated 250 years since the signing of the Declaration of Independence in 1776. The US is by far the most prosperous and powerful country in the world. What is the secret to its enduring success? One word: liberty.

The US stretches from the Atlantic to the Pacific oceans.

These oceans have kept its enemies at bay for hundreds of years, while still enabling it to trade with the rest of the world.

The US is endowed with almost every natural resource known to man. It has abundant deposits of coal, oil, and natural gas ensuring energy independence while fuelling its industrial power.

Its fertile land enables the US to produce up to 15% of the world’s food and agricultural products, much of which is exported. It is blessed with an expansive network of 20 000 kilometres of navigable rivers which facilitates both domestic and international trade.

Yes, the US has many “natural” advantages. But geography is not destiny.

While Africa lacks navigable rivers, it is arguably more resource rich than the US – yet its people are still poor.

Brazil’s Amazon Basin has 50 000 km of operational waterways but accounts for a smaller percentage of global trade than the US does.

Russia has a larger land mass, but its Gross Domestic Product (GDP) of $2.66 trillion is twelve times smaller than the US GDP of $32.38 trillion.

What about demographics?

The US has the third largest population in the world with close to 350 million souls. While India and China are not exactly poor, if population size guaranteed economic growth, then these economies should be four times larger than the US with their respective populations of 1.4 billion.

Key ingredient

The basis for the success and durability of the US is neither its geography nor its demography, but its dedication to liberty.

This finds expression in the free enterprise system, the great driver of American prosperity.

The US economy is not only large, but also dynamic. The American approach is to embrace innovation, not to treat it as something to be feared and controlled even if it poses certain risks. Consequently, the US economy has a healthy appetite for disruption that enables it to reinvent itself entirely without central planning or direction from state authority.

America’s early industrialisation was propelled by world changing inventions, such as Eli Whitney’s cotton gin (1794), Alexander Graham Bell’s telephone (1876), and Thomas Edison’s light bulb (1879).

In the early 20th century, inventors like the Wright Brothers and Henry Ford ushered in the age of flight and mass production. They paved the way for the space age and the digital revolution that is still unfolding today.

Now, the US leads the global Artificial Intelligence race, with China following at a distant second, and Europe hardly registering.

This relentless technological progress is no accident.

It is the product of a foundational idea that man should be free to engage in commerce without encumbrance from the state and that it is men with bold ideas who change the world, not bureaucrats.

Voluntary exchange, purposeful human action, and the profit motive combine to make the world better.

Legal architecture

All this rests on a political system founded on the principles of limited constitutional government and the rule of law.

In their wisdom, the American founding fathers recognised that human beings are flawed, and that they tend to try to accumulate power at the expense of others.

It is for this reason that George Washington, a war hero who defeated the British in the American Revolutionary War in 1783, and who could have ruled the newly formed US as a de facto king, chose instead to step down from the highest office.

This understanding of human nature stands in contrast to the French Revolution of 1789, which sought to violently remake French society through the creation of a “New Man” (l'homme nouveau). The chaos unleashed by the Jacobins was swiftly followed by the iron fist of Napoleon’s dictatorship.

The American constitution authored by Thomas Jefferson, Alexander Hamilton, and James Madison, among others, constrains political power by providing checks and balances, such as a bicameral legislature, tenured judges, and a directly elected president (although term limits were only introduced in 1947 after Franklin D Roosevelt sought to defy convention with his four presidential terms).

These branches of government are understood to stand in competition to one another, rather than the more modern and less constitutionally effective notion of “cooperative” government.

As the name implies, the US is a union of states, each with its own unique character and domain of political authority. This federal system of government disperses power down and out, giving local communities more control over their own affairs.

Most importantly, the constitution also guarantees freedom of speech, without which representative government, political competition, the right to petition the government, and a free press would be impossible.

While Americans are a pious bunch, America’s constitution ensures religious liberty and there is no official state religion, which led to many a bloody war being fought in the Old World.

The right to bear arms provides a check on excessive state power and makes the country easier to defend against foreign aggressors.

These legal instruments are combined with extensive protections for private property rights, ensuring that you get to keep what is yours, incentivising you to be more productive, and further dispersing political power.

Imperfect union

Critics will point to the dark chapters in America’s history, most notably slavery, which was institutionalised in the plantations of the South.

Abolitionists like Frederick Douglass rightly argued that the rights enshrined in the constitution should be extended to all Americans. It was a cause so fundamental that it nearly tore the union apart over four brutal years of civil war (1861 to 1865).

The US is not perfect, but no country is. That is the point.

The great insight of the founding fathers is that utopianism can lead to hell, but human progress is still possible within the right constraints. The operating system of the US allows for political change to occur without the need to violently overthrow your opponents.

But it is not only the legal architecture and the political system that make America great.

You cannot simply copy these systems and paste them in another country. It requires a flourishing civil society, and a political culture which values individual liberty, strong communities, and free association, and which is prepared to stand up to defend those freedoms when they are invariably challenged.

America is an idea. That idea is liberty.

Ansara is CEO of the Free Market Foundation.