During the Great Depression of the 1930s, what helped economic growth in the US in the 1930s is monetary policy. The United States had a central banking system in place that was separate from the Federal Reserve. The US Federal Reserve System set interest rates and the amount they were willing to let loan out to businesses and individuals for use in investing and making investments. They also had a central bank that issued the US currency. The US was very different from the rest of the world in this regard. Other countries in the world, like those in the rest of the world today, rely on central banks as a form of currency.
In the US, central banks are needed because a market system, the gold standard for instance, was in place that prevented any one from using force against the currency of other countries. Without central banks to control the money supply, there would be a free market for goods and services and capital goods and services. Free markets provide a level playing field for everyone. This means everyone has an equal opportunity to enter the marketplace and to have goods and services to sell or buy. There is a level playing field and this helps economic growth.
For anyone to have access to capital and money, they must have access to the market. To get to the market, they have to start with their own funds. Most people will need loans for some type of investment in order to get them started. Without loans and investment opportunities, they will not be able to get started and they may end up in a very bad position. However, if they are backed by a good and strong free market, they will be able to get off of the ground.
How does economic freedom help promote economic growth? When people are able to start their own business, they have the ability to control their own economic destiny. They can decide what type of investment they want to make. They can determine what type of products they want to offer. They can choose to be sellers or buyers in their own right and have their own business that they control.
By having the opportunity to create wealth from the ground up, these same individuals can then be free to help others with their problems. When you have the opportunity to have free unhampered economic growth, you will be able to help solve other people's problems and you can do this by providing goods and services. This is what makes the free market system work so well.
How does economic freedom help promote economic growth? In the beginning, when people are struggling to get by, it is hard for them to invest in the things they need and want. Even when they do have the money, they often do not have enough to start a business of their own. However, if they were able to secure private loans and capital for growth, they would be able to get their businesses off the ground and begin to provide for their families. When people have the option to invest and have some growth capital, they tend to be willing to invest in other people's ventures.
Another way that economic freedom helps promote economic growth is through taxation. If the government were not collecting taxes, people would not feel the need to invest. However, if the government was collecting taxes from individuals and businesses alike, they . . . . . . would have more incentive to make investments in the economy. If everyone had to pay their fair share of taxes, there would be less of an overall economic decline.
It is also important for individuals to realize that the free market is a place where there are no barriers to entry. This means that there are opportunities for all forms of entrepreneurs. If someone wants to start a business that offers products and services, he has the ability to enter the market and compete with other businesses. He can work with other business owners and attempt to help them grow their businesses into bigger ones. He has the ability to offer services to customers that will help make his client base even larger. If everyone had access to capital and loans similar to those available to businesses, the world would look very different.