Some people think that the way for their city or state to get ahead is for the state and local governments to make economic bets on technocrats. If officials give these fountainheads of growth the bike lanes and light rail they want, the cities or states will thrive. Or they could win by luring the next big thing to open within their borders, offering big checks from the treasury if necessary.

It’s a mirage that has misled a lot of people. Michigan won’t get back to being a leader in national prosperity through targeted investments. It will do better when government officials master the basics.

The basics matter. The states that have the best rules grow the most. And the best rules are the ones that provide the most liberty to citizens.

This is an important conclusion from the people who study economic growth. It is also something you can see by looking at economic trends across the nation. Clear and limited law invites prosperity.

The states doing well are the ones that let people prosper. Idaho and South Carolina have grown their populations the most by attracting people from the rest of the country over the past four years. They are also among the top states for economic freedom. The states that have lost the most people to other states have been California and New York. These are among the states with the least economic freedom.

The chart below looks at a measure of each state’s economic freedom compared to its net domestic migration. The Fraser Institute’s Economic Freedom of North America score is measured against Census Bureau population data. Each state is represented by a dot. That all the states are clustered around a trend moving up and to the right suggests that states with more economic freedom attract more people.

The states with the most economic freedom are also the states with the most job growth. Idaho, Utah, Texas and Florida lead the country in job growth from before the COVID lockdowns until now.

That’s a broad look at trends. The point that the rules matter also applies when we narrow our focus.

Spending on local goodies and critical industries is tempting to policymakers because it appears to show that they are doing something about the economy. Surely landing a company with taxpayer support does something. Surely downtown placemaking is worth something.

Maybe. But the question is how much it matters and whether the costs outweigh the benefits. This comes down to a matter of scale. While the deals that lawmakers make seem like a big deal, most jobs are created and lost without special preferences.

Every year, the state loses more than 20% of all of its jobs, and it gains more than 20% of all of its jobs. That turnover accounts for roughly one million jobs created and lost in Michigan over the course of a single year. Most of this is done without fanfare, without businessmen asking permission or favors from the government.

The deals that elected officials make are seen. They get promoted by lawmakers and administrators, regardless of whether they deliver on their promises. The job growth that happens without press releases goes unseen, though this growth is highlighted in the economic data. Most job growth is unseen.

This is why state growth trends matter more than subsidized battery plants or walkable “towne centres.” The states writing the biggest checks to the biggest companies are losing, and so are the ones building the grandest city parks and fountains. Nor are people thriving in the states that announce innovation corridors. The prosperous states are the ones that get the basics of policy right.

Policy doesn’t need to teach people to “truck, barter and exchange one thing for another,” as father of economics Adam Smith said. We do those things naturally. What we need is the freedom to find the win-win situations that drive economic growth. We need clear rules and light burdens from government.

In other words, you don’t have to teach the grass to grow. You have to get the rocks off the lawn, as Wayne Crews of the Competitive Enterprise Institute notes.

It’s easy to understand why people want a nicer downtown area and the next big factory. It sounds right and looks right, and surely it seems to do something. But take a step back and you will see that the basics drive growth. There are plenty of basics that lawmakers ought to improve.

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