Economic Freedom is the Key Success

The 2007 Index of Economic Freedom is out. As usual, the U.S. is very good but not the very best. Both economic and cultural factors are obviously important. Eight of the top ten are to some extent Albion’s seed and all are places where you might want to live. In contrast, all the unfree countries are dung heaps. Cause and effect may sometimes be mixed, but clearly economic freedom goes with other good things.

Our own country is slipping a little on government interference. It might get worse if the current congress keeps its promises. We score high in business and labor freedom.

We sometimes get into fruitless discussions of left & right, liberal & conservative. These labels were useful when they were created, and they can still be useful in our internal debates, but they do not fit internationally or historically. We really need multivariate analysis. During the Cold War, it was clear that "capitalist" Americans were more like "socialists" Swedes than either were to "communist" Soviets, while Soviets were much more like "fascist" Nazis. The left/right spectrum is just wrong when applied outside particular countries and political contexts. The pragmatic thing to do is consider the practical costs of government interference against the tangible benefits of government programs. This index helps in this respect. It allows a country's strengths in one area to offset weakness in another. The groups that result make intuitive sense. The U.S. is near Australia, UK, New Zealand and Ireland (none of us would really object to living in these places) while Zimbabwe, Iran, Cuba and North Korea (places where none of us would live voluntarily) also flock together.

It is very hard to give up the left/right Manichaeism. Most of us grew up with the Cold War distinctions. We learned our history through right/left lenses. We have to unlearn that.

Nothing works in every situation. We should be concerned with what works versus what doesn’t in the situations we face. The best system does not get it right all the time; it relies on experimentation, adaptation and flexibility. We have to try lots of things and be willing to tolerate ambiguity and unequal outcomes.

The government works best when it gives people the freedom to do their best. Government cannot create wealth and happiness. It can only create conditions that might help individuals do that. The freest economies are also the places highest in other values. This is not a coincidence.

Posted by Jack at January 17, 2007 8:24 PM
Comments
Comment #203774

I agree. I call myself a moderate democrat. I used to call myself a moderate republican. I don’t line up 100% with any wing or place on the spectrum. I figure out that I average out to moderate something.

Posted by: Richard at January 17, 2007 8:54 PM
Comment #203775

‘Economic Freedom’ as used in this context, Jack, does not refer to laissez faire and strict adherence to caveat emptor as the only protection for consumers and the society as a whole. It does refer to regulated and rule bound economic activity that prevents the excesses of manifest greed to the detriment of the economic system as a whole.

True and literal economic freedom looks like the drug wars on the Mexican border, or the gang violence and warfare in L.A. between Blacks, Hispanics, and Whites for the drug and fencing trade and turf.

Let’s be careful about defining what it is we are talking about. Because, many on the right lacking in education about economics and its historical contexts, fall for that anarchic laissez faire, hook, line, and sinker, failing to recognize its import.

This is one reason Republicans lost in November. They catered to the laissez faire crowd to the detriment of the economic realities of national debt and their import on our future economic welfare.

In the end, Good Economic Freedom balances freedoms of industry and capital against the good of the economy over time and the other needs of the nation. All powerful and successful “free economic systems”, are regulated and overseen and balance freedom against sustainability, responsibility, and overall health and well being of the society.

Posted by: David R. Remer at January 17, 2007 8:55 PM
Comment #203777

David

You have not heard me say many bad things about Clinton and that is why. When Dems behave in a way that increases economic freedom, I do not have a problem with Dems. When Republicans do the opposite, they are on my s**t list.

In my experience, Dems like to regulate more than Republicans. They also like to regulate in ways that interfere more with economic freedom.

You may have noticed that I have not been jumping on the Dems very much - yet. I really do not expect much from them, however. I think their instinct is to try to create equal outcomes, support unions etc.

Re the debt - revenues are at an all time high. The deficit has declined by $165 billion over the past two fiscal years. The Treasury recons tax receipts in December were $18 billion higher than a year earlier.

I do not like a big Federal debt, but the government clearly gets a big enough bite. I hope (but do not expect) the Dems will cut spending like Gingrich did. At least divided government might slow it down.

Posted by: Jack at January 17, 2007 9:12 PM
Comment #203782

That’s weird… Authoritarian Singapore beat the crap out of us in “Freedom From Govt.”

What were the respective scores in 2000?

Posted by: American Pundit at January 17, 2007 10:08 PM
Comment #203784

AP

In 2000, Hong Kong was #1, Signapore #2 and U.S. #3. Our relative positions are the same; it is just that Australia has come up.

A problem with government in the U.S. is transfer payments. Singapore only spends 14.6 percent of GDP.

Posted by: Jack at January 17, 2007 10:28 PM
Comment #203785

I meant the respective scores for “Freedom From Govt.” What I was getting at was, has that category gotten relatively worse or better since 2000?

There isn’t an equivalently named catagory in 2000, but we beat Singapore in all the govt. regulation categories back before Republicans took over everything.

So, why do you think US govt. regulation (or oppression, as the new category hearder seems to imply) is worse now than six years ago?

Posted by: American Pundit at January 17, 2007 10:59 PM
Comment #203787

AP

Republicans grew the government. When they went from to the party of government, they tried to same old buying favors the Dems had done. Unfortunately, government tends to grow at the expense of liberty, even among conservatives.

In the late 1990s, you still were getting the benefits of the Republican revolution. They really did cut and fight, even closed the government. I do not have a big problem with Clinton, but he clearly was headed down the path to the dark side until 1994 when he was chastised.

I also think the war on terror necessarily grew the government. When I think back at how naive we were in the late 1990s, it would be funny if it did not have such a tragic end.

As I wrote other places, I do not expect much from the Dems. The liberal wing did not like Clinton very much until he was under attack and it retrospect. They called the DLC “Republican lite” and they were right.

As for the new Dems, I will judge by what they do, not by what they say. My belief is that people like Pelosi, Rangle etc do not really like or understand the free market. They see it as a big casino to be ordered, not a source of wealth creation. In the goose that lays the golden eggs story, they would kill the goose and try to get the eggs by government decree.

The Dems I kinda like are people like Robert Rubin, Robert Reich, or Larry Summmers. How popular are those guys with the current Dem leadership? I really do not know. (This is a real question.)

Posted by: Jack at January 17, 2007 11:20 PM
Comment #203796

I really hope that everyone takes time to make some comparisons:
http://www.heritage.org/index/countries.cfm

Especially in the case of the USA:

“Freedom from Corruption - 76.0%
Corruption is perceived as minimal. The United States ranks 17th out of 158 countries in Transparency International’s Corruption Perceptions Index for 2005.”

“Labor Freedom - 92.1%
The labor market operates under highly flexible employment regulations that enhance overall productivity growth. The non-salary cost of employing a worker is low, and dismissing a redundant employee is costless.”

Anyone out there “non-salaried”?
Feeling a bit expendable?
You are.

Posted by: KansasDem at January 18, 2007 1:15 AM
Comment #203798

Feeling expendable? You are.
What!

Why do Democrats have to be so gloomy. If things aren’t going well for you work harder or if don’t like you’re job get another one, you live in America. You have every opportunity to prosper in whatever field makes you happy, if you can’t do that in this country you probably are cursed.

Posted by: andy at January 18, 2007 2:15 AM
Comment #203800

Jack
Singapore really does put a hole in any sweeping statements about “other values”. Nice try though.
Interesting that heavily unionized Australia ranks the same as the US in labor freedom . Of course the Heritage Foundation (dare I sat it in light of your noL-R stance) is a right wing propaganda mill dressed up in pseudo-intellectual garb whose analysis is always suspect.

Posted by: BillS at January 18, 2007 2:59 AM
Comment #203801

Jack said: “The deficit has declined by $165 billion over the past two fiscal years.”

A meaningless statement. The Republicans saddled us with one year of over a half trillion deficit. The deficit this year is still over 1/3 trillion. We are talking fluctuation here. Not trend! The national debt grows with every deficit dollar. Cutting the deficit in half only means growing the perilous national debt somewhat slower.

We are still on track for doubling the national debt in 8 years of Republican control, just with the legislation they have already passed and spending already obligated.

It took more than 200 years to get it as high as it was when Bush took office and Republicans gained control of Congress. It will have taken Republicans less than a decade to double it.

Now, when Democrats and Republicans can say they have generated a 165 billion surplus (I’d settle with zero deficit), I will modestly applaud. Our future of the next 50 years are going to place enormous and incredibly consequential demands on our economic and governmental resources, and we squandered a lot of the resources we would have needed to meet those challenges.

That is the Republican and Democratic Party legacies for the 21st century. Economic policies of today have enormous consequences for decades. Economic data today, says little to nothing about the value of current economic policy in terms of meeting future challenges and demands of the nation.

In the future world of globalization trends extended, we are losing ground and future viability. Economics is not the depiction of wealth and obligation statistics in a moment of time, but, the study of the nation’s resources management and its capacity to, at the very least, maintain quality of life standards and meet the demands and challenges of the nation’s people for decades pending.

In other words, macro-economics is a study and picture of a multi-generational capacity of a nation’s ability to maintain its viability and quality of life standards.

I always found it a testament to Bush’s ignorance and incompetence when he so proudly boasted year after year after year that one day he would cut the deficit in half. Did you know you can cut the deficit in half for an infinite number of years and never, ever leave the deficit spending realm?

Posted by: David R. Remer at January 18, 2007 3:21 AM
Comment #203811

Interesting post,Jack.

I do think freedom and reduced involvment in government subsidizing helps economies.

I agree with most of what you’ve posted here, thus far.

Isn’t Singapore largely a banking entity, and makes its money manipulating other people’s money? Given that money is an artifice, aren’t they profiting by allowing corporations to avoid other countries regulations?

What do they produce?

I knew an accountant who lived there. He said that Singapore residents simply go to other countries to let loose. It seems to me they exist as a parasite on other nations.

Posted by: gergle at January 18, 2007 7:44 AM
Comment #203812

Jack,I thought you’d like this link

Posted by: gergle at January 18, 2007 8:12 AM
Comment #203813

Sorry Jack, Ireland is not Albions Spawn. Never was, never will be. We were always distinct and separate, even if while under the jackboot, only emotionally and intectually so.

Posted by: Paul in Euroland at January 18, 2007 8:25 AM
Comment #203823

Jack
Yeah,us Dems are always complaining but before we have a group hug about how great everything is lets look at our apalling infant mortality rate and face the fact that unless we do something soon about healthcare life expectancy will start decreasing for the first time in our history. I am sure the Heritage Foundation will come up with charts and graphs explaining how great that is.

Posted by: BillS at January 18, 2007 10:55 AM
Comment #203828

The Heritage Foundation is about as right wing an organization as it gets. I don’t believe they are impartial, and I suspect “freedom” means the ability of corporations to do whatever they want regardless of whether that’s sound economically. For instance, being able to fire at will has not helped American corporations become more efficient or profitable. If you are goint to invest in a company would you rather look at their “Freedom” index or their bottom line?

Here’s what a real organization, “The World Economic Forum” has to say about where Bush’s deregulation policies have put the U.S.


Global Competitiveness Report 2006-2007

Switzerland, Finland and Sweden are the world’s most competitive economies according to The Global Competitiveness Report 2006-2007, released by the World Economic Forum on 26 September 2006. Denmark, Singapore, the United States, Japan, Germany, the Netherlands and the United Kingdom complete the top ten list, but the United States shows the most pronounced drop, falling from first to sixth.

Posted by: Max at January 18, 2007 11:16 AM
Comment #203834

Jack says,

We sometimes get into fruitless discussions of left & right, liberal & conservative. These labels were useful when they were created, and they can still be useful in our internal debates, but they do not fit internationally or historically. We really need multivariate analysis. During the Cold War, it was clear that “capitalist” Americans were more like “socialists” Swedes than either were to “communist” Soviets, while Soviets were much more like “fascist” Nazis. The left/right spectrum is just wrong when applied outside particular countries and political contexts.

I hope everyone realizes this is code for: Strangely, many socialist businesses seem to be as competitive, efficient, and profitable as those in the U.S. Rather than admit this means I have some thinking to do, I’ll just redefine what right and left usually mean, and say those terms don’t apply right now.

Posted by: Max at January 18, 2007 12:09 PM
Comment #203837

Also, here’s what I would guess the history of the “multivariate” analysis is:

Intern: Hey Boss! You know that report you wanted me to write about how deregulation leads leads to increased efficiency and profitability worldwide? Well, I ran into some problems with the facts. It turns out the most profitable economies are heavily regulated. What do I do? We’re paid and read exclusively by Republicans who consider this deregulation stuff Gospel!

Editor: There you go again. You’re making the mistake we Republicans call being “reality based”. We may not be able to show that deregulation increases the bottom line, but we can identify a number of deregulation practices and call them “freedom” practices. We can say that the more a country uses them, the higher their placement on the “Freedom index!”.

Intern: Wow! Everybody loves freedom! I’m going to use this the next time I get into an argument with a Democrat who wants to talk about what has “worked”. I’ll be like “whatever… how much freedom is it? What’s it’s apple pie quotient? Thanks!”

Posted by: Max at January 18, 2007 12:28 PM
Comment #203845

Andy
Personal responsibility is WRONG and does not work.
More govt is the only answer.
Haven’t you been reading?
Many socialist nations businesses are as “competitive, efficient, and profitable as those in the U.S.”
Nevermind that we have a Constitution and are a free country (kind of), and totally different than those other countries, the U.S. must become even more socialist.

Posted by: kctim at January 18, 2007 1:38 PM
Comment #203846

Paul

I thought of you as I wrote that. Ireland fits the pattern as Hong Kong or Singapore. It got the benefit of British institutions. I understand you may disagree with the word “benefit” but it was beneficial for both our countries to be in the British global system. Another thing - my ancestors were central European; yours presumably were Celtic. Isn’t it nice we can all use English?

BillS

Re Singapore, anybody can leave Singapore when they want. Not many people do. It has most of the things people value. It also is a good case study in the overlap/contrast between liberty and democracy.

Gergle

See above. Singapore, Hong Kong and many others of the top performers are small. Sometimes you can do in a small place what you cannot do in a bigger one.

Re you link. Yes. I saw that and I like it.

David

Ideally, I think we should generate a small deficit every year. Government has no business running a surplus. It should generally live within its means and not take too big a bite.

Max

I wrote a post others too and and here. I didn’t catch the newest one. Thanks. There is a great deal of correlations between lists that show competitiveness, quality of life, freedom and globalization. The exact rankings are different, but the shape is the same. The more of one you have, usually the more of the others you have.

The yearly rankings concern me not that much. The U.S. lost its relative position because of macroeconomic factors. They are a concern, but the U.S. is still the most competitive large economy. Those ahead of us are essentially the size of some of our states. Some things work on a smaller scale, but not on a larger one.

Re socialists, I cannot think any socialist businesses that are particularly competitive. Many other countries have begun to do better in recent years by cutting regulation and taxes. The U.S. has one of the highest corporate tax rates in the world. We used to have one of the lowest. We didn’t change, but others improved.

Posted by: Jack at January 18, 2007 1:40 PM
Comment #203848

Switzerland, Finland and Sweden all have more competitive economies than the U.S. and also support social programs like protecting jobs, health care, free education, etc. Less regulation is not always the more responsible thing and does not always lead to greater efficiency and pofitability.

Posted by: Max at January 18, 2007 1:48 PM
Comment #203851


Economic freedom is the same as the Lord of the Rings. They are both fantasy.

In America, economic freedom means a defense dept. controlled by the military industrial complex, a food and drug administration controlled by the food and drug industry and a deptment of agriculture controlled by agribusiness.

In agribusiness, corporate predator pricing and government programs have combined to virtually destroy family and small scale farming in America. If not for so called economic freedom, several millions of Americans could and would make a living from farming. The only economically free farmers in America today are the marijuana farmers and even there, prices are artificially inflated because of government intervention.

In America, economic freedom can best be defined as the corporate way. In the not to distant future, virtually every business in America will be a corporate franchise. I am supprised that there isn’t a mom and pop corporate franchise competing against the real mom and pop country stores in every rural town in America. Corporate pricing clout could drive all the mom and pops out.

Posted by: jlw at January 18, 2007 2:02 PM
Comment #203852
Jack wrote: Re: the debt; revenues are at an all time high. The deficit has declined by $165 billion over the past two fiscal years. The Treasury recons tax receipts in December were $18 billion higher than a year earlier.
That’s meaningly less compared to the total federal debt of over $22 trillion ($8.6 trillion National Debt, $12.8 trillion of Social Security debt, $450 billion PBGC debt, etc.).
Jack wrote: I do not like a big Federal debt, but the government clearly gets a big enough bite. I hope (but do not expect) the Dems will cut spending like Gingrich did. At least divided government might slow it down.
Divided government has seldom slowed excessive spending, borrowing, debt, excessive money-printing, pork-barrel, corporate welfare, graft, and waste.

BTW, during Clinton’s second term, the annual deficits were almost reduced to ZERO (in part) by massive money printing (between 1995 and 2000).
Some of the M3 increase was growth, but not all $2.5 trillion of it (from 4.636 trillion to $7.117 trillion).

It’s a good thing most Americans don’t understand the magnitude of the massive debt, borrowing, spending, and excessive money-printing. Otherwise, they would be worried; they would realize that there will eventually be a price for so much fiscal irresponsibility.

Congress and the executive branch (Democrats and Republicans alike) did it, and voters rewarded them for it by repeatedly re-electing them.
The only innocent victims are the future generations that will be saddled with the painful consequences.

Posted by: d.a.n at January 18, 2007 2:05 PM
Comment #203857

Jack:

You talk about “economic freedom.” What does it mean? It means freedom for businesses. What about employees? Do they have freedom?

Everything you say in this column is about business, as though there is nothing else. Why don’t you think in terms of freedom for employees? After all, we have a hell of a lot more employees than businesses in this country.

And don’t tell me that what is good for business iis good for workers. It ain’t so.

Posted by: Paul Siegel at January 18, 2007 2:34 PM
Comment #203859

So FANTASTIC! We’re number 4 in “economic freedom”. And I think we are number one (or close to it)for poverty rate and wage disparity.

So what does the “Economic Freedom” index measure? What does it prove?

http://en.wikipedia.org/wiki/Image:Percent_below_poverty_line.png

http://upload.wikimedia.org/wikipedia/en/d/d4/Gini_since_WWII.gif

Posted by: muirgeo at January 18, 2007 3:09 PM
Comment #203861

Max,

Great post with the link to the World Economic Forum.

They measure results…Jacks Heritage Foundation measures “Economic Freedom” whatever that is.

Posted by: muirgeo at January 18, 2007 3:33 PM
Comment #203862

Paul

Workers have the right to find other jobs. I am a worker (i.e. I did not inherit money and I depend on salary for income). I expect you are too. Most of us are workers. Most of us are doing okay.

Muriego

It depends on how the poverty line is drawn. If you take what a person at the poverty line CONSUMES in the U.S. and set that as the poverty line, most European countries have more people living in poverty than we do.

Wage disparity may or may not be a problem. In general, it doesn’t tell you much. Equality of results is not one of my values.

Posted by: Jack at January 18, 2007 3:34 PM
Comment #203870

Does that economic freedom index include freedom for the innocent future generations of Americans who will be the victims of massive debt, borrowing, spending, money-printing, waste, corruption, and fiscal irresponsibility ?

Posted by: d.a.n at January 18, 2007 4:31 PM
Comment #203876

Max
Beautiful,just beautiful!
Jack
Anybody with lots of money can leave Singapore,but they don’t. Why should they. They have lots of money and servants are cheap and you can even beat them if you want. Do you admire autoritarian rule? Zero press freedom . No chewing gum allowed because it might dirty the walkways? Ahh liberty.For some anyway. More of those unequal results you are fond of or the result of “economic freedom”?

Posted by: BillS at January 18, 2007 5:46 PM
Comment #203880

It depends on how the poverty line is drawn. If you take what a person at the poverty line CONSUMES in the U.S. and set that as the poverty line, most European countries have more people living in poverty than we do.

Wage disparity may or may not be a problem. In general, it doesn’t tell you much. Equality of results is not one of my values.


Posted by: Jack


Jack I don’t think there is any factual support for your first claim.

The second one is absolutely contrary to historical evidence. Likewise as Max points out the social democracies of Scandinavian and Europe arguably have better economies, less poverty, less wage disparity and universal health care coverage.

These are actual existing societies that refute everything the Laisse Faire economist spouts.

Democracy is the best way to an egalitarian society as well as a strong economy.

Corporatism and hands off policies are the way to economic disparity, economic weakness and even Great Depressions.

My biggest gripe Jack is that I believe policy is often set in preference to the business community (and actually by the business community) over the desires of the population. You keep putting business interest ahead of democratic principals.

If the desires of most Americans were represented in law and policy I suggest we’d have a stronger society, a stronger economy and a more equitable society. I think the facts current and historic all support that claim.

Posted by: muirgeo at January 18, 2007 6:11 PM
Comment #203884

Jack
When you say “socialist corporations” do you mean enterpises owned by the government? If so I would point to Citgo for one ,even without the 7-11 franchise. The US Postal Service is at least treading water and doing a great job all told. It was never supposed to be a money maker.If you mean corporations based in largely socialist countries then how about Volvo,Nokia,Nestle and many others.

Posted by: BillS at January 18, 2007 7:11 PM
Comment #203896


Jack: When discussing the smaller economies of other countries, I have seen you write, on more than one occasion, that economic policies of some of these nations that favor the workers are usually unique to those smaller economies and not easily transferable to our larger more dynamic economy. However, you seem to think that economic policies, in some of those smaller economies, that favor capital are not unique to those economies and could be applied to our economy. Is there a reason why you think this is true other than bias.

Posted by: jlw at January 18, 2007 8:47 PM
Comment #203903
‘Economic Freedom’ as used in this context, Jack, does not refer to laissez faire and strict adherence to caveat emptor as the only protection for consumers and the society as a whole. It does refer to regulated and rule bound economic activity that prevents the excesses of manifest greed to the detriment of the economic system as a whole.

David, those may be your ideas about what consitutes “economic freedom,” but have you really examined this rankings methodology closely enough to say that that’s what THEY mean? In this context?

Considering Hong Kong and Singapore’s presence at the top, I have to wonder. I mean, we’re talking about two economies that depend heavily on very cheap foreign labor. And places also where worker rights activists can be tossed in jail.

It’s pointless, by the way, to compare our economy in any way with tiny Scandanavian countries where everyboy is the same color, speaks the same language, and culturally identifies with the majority culture. It’s like comparing Vermont to California.

Posted by: Loyal Opposition at January 18, 2007 9:47 PM
Comment #203904

Jack,

A thoughtful analysis, and in theory many of the points you raise are valid. I would put forth, however, that your conclusions suffer from over-generalization and limited frame of reference for many Americans—myself included. Consider the following points in the cause and effect relationship of economic success and “other good things”:

1. Is it a co-incidence that all these nations are, as you put it, “Albion’s”? None of them, in modern times, have faced the cultural and ecomoic upheaval associated with colonialization and its consequent marginialization, if not frank genocide, of indigious peoples (e.g. aboriginies in Austrailia, native americans in the United States and Canda, etc.). I don’t mean to imply that marginalization exclusively refers to live/death struggles in post-colonial; indeed, it is multifactorial

2. Consider a similar type of analysis using values that are not so directly tied to the pursuit of monitary gain. Even in this country, having “lots” of money is not the be all and end all for everyone. Non-materialist “values” are important to large sectors of our population. Such analysis may in fact reveal a different order of nations perhaps putting some of these “dung heap” countries ahead of the United States.

3. Consider that this analysis represents 161 nations. What are the criteria used to “select” nations. How would the inclusions of other countries not on this 161 list affect the analysis and its final outcome. In fact, the report indicates that the 161 list was cut short because “grading” was suspended in four nations presumable because of the “skewing” effects of war—excluded nations include Sudan, Iraq, Democratic Republic of Congo, and Serbia-Montenegro.

There are several other factors that I could list but I will sum up my point by stating that there are a variety of factors that make a nation “successful” not soley the ability to buy and sell.

Incidentally, Americans have learned history through a far more cloudy lenses than those obscured by “left/right” ideologies.

Posted by: Kim-Sue at January 18, 2007 10:03 PM
Comment #203907

Kim-Sue, holding “non-materialist” values is almost always a luxury of affluence, peace and privilege.

In America, those claiming not to be materialistic are usually pretty well set up. They’re not materialistic only because they’re able to meet their material needs with relatively little effort by the world’s standards.

There may be indiginous populations here and there which are the exceptions to the rule, but they are incredibly tiny and exist in places like the jungles of Papua New Guinea, where the expected lifespan is something like 35 years old.

In the US, we have people like the Amish who could be said to be like that—but they undoubtedly survive only because they’re surrounded by a peaceful well-regulated society and by the affluence of the larger population. If they were in the Sudan or North Korea, they’d last all of about five minutes.

Posted by: Loyal Opposition at January 18, 2007 10:23 PM
Comment #203910

Muirego

The situation in Scandinavia is just different. They are smaller homogenous countries. In Norway they have proportional representation that virtually ensures nobody ever gets a majority and they have to keep the same parliament for four years. This system would work no place but Scandinavia. I have never seen any people as honest as Norwegians. They actually follow the rules to a very large extent and are generally reasonable.

The welfare state is having a big problem with diversity. Welfare states work when people trust each other and people only trust people when they feel they understand them. People best understand others who are like them. America is not like Scandinavia and that is the way most Americans want it.

In any case, you need also to compare Scandinavian countries to American states with similar population composition. If you want to compare the whole U.S., you need to compare it to the whole EU. If you cherry pick U.S. states, you can find a pretty good group. Just take the states where I have lived: Wisconsin, Minnesota, Maryland, Washington State, New Hampshire & Virginia. I bet they would stack up well in many measures.

I experienced health care in Norway when I was in a traffic accident. One of my sons was born there. The public hospital experience was very similar to the County Hospital experience in my native state of Wisconsin. Norwegians are tougher than Americans. I do not think most of us would be content with the care.

BillS

See above. The countries are just different AND they have changed a lot in the last 20 years. Some of your images are outdated. Most of the “socialist” countries have lower corporate income taxes. Many have no taxes on capital gains and low inheritance taxes. There are significant differences in scale, history, culture etc.

Citgo is poorly managed. It makes its money because of its monopolist position. Nestle, Nokia etc are not socialist firms. I happen to own some Nokia stock. You could too.

Jlw

The reason they are not transferable is both scale and culture. As I mentioned above, the average Norwegian is just very honest and modest. I like that better than that in-your-face sassiness displayed by many Americans, but that is the culture we need to deal with here. In Scandinavia, you also have very strong social control. The countries are like small towns where everybody knows everybody else. My wife’s family emigrated from Hedmark (a region in Norway) 150 years ago but many Norwegians could guess that just by looking at her. Talk about everybody knowing everybody.

I lived in Norway for four years. I like Scandinavia. I bet most of you would not.

Posted by: Jack at January 18, 2007 10:34 PM
Comment #203915

Kim-sue

There is an old joke that goes like this:

You should take into account that Johnny misbehaves because he comes from a broken home. Of course Johnny would break any home he came from. Some cultures are destructive.

War and civil strife can be culturally based and strong cultures recover quickly. Think of our American civil war. It was a terrible confict, but then it was mostly done. Robert E. Lee told his troops to go home and be good citizens and most did. Terrorists did not attack trains in NYC or Washington.

Consider colonization. Ireland, Hong Kong, Singapore, New Zealand, Australia & the U.S. were all British colonies. S. Korea, Malaysia or Taiwan were very recently colonies. No place in the world has experience more destructive war on its soil than Poland. On the other hand, S. America has been independent since the 1820s. Most Middle Eastern countries were colonized only briefly and some not at all. Colonization is not a good explanation for wealth and poverty. Culture and politics is a better one.

My favorite success story is Mali, which is poor, African, Muslim & still manages to be a democracy. If we want to know what makes a country good, we should study the success stories instead of analyzing failure.

Posted by: Jack at January 18, 2007 10:56 PM
Comment #203918

Loyal Opposition, this ranking’s underlying assumptions are exposed as inadequate by the arguments I put forth.

“I mean, we’re talking about two economies that depend heavily on very cheap foreign labor.”

You mean like the U.S.?

“And places also where worker rights activists can be tossed in jail.”

Like China. Not much different than in the U.S. where arrest and loss of employment can occur as a result of worker rights activism due to Right to Work laws, which is a contradiction in terms if I ever heard them. China doesn’t arrest worker right’s activists unless they create civil unrest. Mao’s China is ancient history.

Not saying its better, just that today’s China will ignore you if you don’t play ball, and that is more effective than being arrested. Arrested one has a roof and food. Ignored, one may live searching and scrounging trash cans for one’s next meal. The parallels with the U.S., especially in Republican dominated states, is striking.

Posted by: David R. Remer at January 18, 2007 11:21 PM
Comment #203927

Jack,

Since apparently no other country is comparable to America (especially the ones doing better the us) then I suggest we compare America to America.

First I’d argue that the post Roosevelt era into the 50’s, 60’s and 70’s was the most economically successful and in no other time was the middle class so well off. I could point to our last 3 depression all preceded by a “hands off, deregulatory , laissez faire” approach.

Finally I could point you to the prosperous more regulated Blue states where most of our economy comes from and where the average income is higher.

Good democratically lead government leads to increased prosperity and a more stable and strong society. Lax government with poor oversight inevitably leads to wealth inequity and a less stable society and less stable economy.

Posted by: muirgeo at January 19, 2007 2:17 AM
Comment #203929

Jack
Citgo makes money in the US also where it does not enjoy monopoly status. The stations are clean,the pumps work and the employees are reasonably attentive.
Norways people live statistically longer. I suspect it is not because they are “tougher” and certainly not because they are more temperent. They have better access to healthcare. You may not have liked the county hospital atmosphere but many Americans are lucky to even recieve that.
Again definition of terms. To me socialism means public ownership of institutions that we all MUST use. We have a degree of socialism,all countries do, fire dept.,sewer plants,most of the transportation system including Amtrak,the post office,the military,police dept.,thousands of municiple power companies,water systems etc.Out side of those that came to being by wise plannig like the post office and the military(although there was debate) these institutions ,companies if you will,were created because the private sector either failed or were inadequate to the task. It is pretty evident that our healthcare delivery system has failed. It has certainly fail 40 million or of our fellow Americans. Granted they do recieve emergency care,the most expensive care there is , and the rest of us pay for it. That is the worst form of socialism,socialism with no accountability. All the other institution I mentioned have some governmental oversite ranging from water boards to congress.Actual socialized medicine would mean all the medical workers would be government employee and the facilities would be government owned.Although we do have a large medical delivery system that is like that that works pretty well,the VA,it is not a likely solution. A more likely solution,to my thinking anyway,is single-payer. This would introduce cost and quality controls and remove much of the burden from responsible businesses that provide employee healthcare.This seems pretty off thread but one of the reasons that Nokia is doing well is that they have less of a burden. PS I own Nestle

Posted by: BillS at January 19, 2007 2:59 AM
Comment #203938

The U.S. postal system is failing too. It is giving business a huge discount to fill our mailboxes with junk mail which nearly no one wants. That’s what happens when privatization schemes are sanctioned for governmental operations.

And where does all that junk mail go? Billions of tons of it. Into landfills largely, driving up our costs for waste management. Checked the rise in your garbage bill lately?

I no longer use garbage pick up service. I recycle our paper goods, cans, and glass as well as all vegetable scraps. What’s left, I drive out to the landfill myself once every 3 to 4 months with a pickup truck load, and for $16.50, I can dump my garbage where the vast bulk of it can create methane which is recaptured from the landfill for generating power.

This is how it should have been done from the 1960’s onward when the option was readily available and written about. But, most Americans figured they had more money than time to segregate trash and recycle. Plus, there was little incentive to do so, and large profits to be made for not doing so, by the Waste Management Companies. Now, they are huge as are their profits.

Posted by: David R. Remer at January 19, 2007 5:05 AM
Comment #203952

Murego

It is difficult to compare any country to the U.S. because the U.S. alone makes up more than a quarter of the entire world economy, we have such a large and dynamic world market and our currency is the world’s reserve.

I am not saying, however, that we cannot make some comparison. But you have to scale them up or down. Scandinavian countries are the most prosperous in Europe. If you choose only to compare them to the whole U.S., it is invalid. Compare Norway & Sweden to Connecticut, Wisconsin or Minnesota. Maybe you can compare some other states to Bulgaria or Romania. Would it be fair to compare the New Hamshire to the whole EU? You can compare overall U.S. policy to overall EU, Chinese, Indian, Russian or maybe Brazilian policy.

What you cannot do is compare a country of 5 million to a country of 300 million and expect the comparison to really fit.

Re history, I have written about this. The post war U.S. system was working very well until the 1970s. Then it ran out of steam. The late 1970s were the worst times in my lifetime. Nothing works forever. Conditions changed. The U.S. is still very prosperous. We adapted very well in the 1980s. To say that the current system works does not necessarily disparage the previous system, which also worked under different conditions.

In a natural succession, a maple-beech forest comes after a pine forest. The pine forest did not “fail”. The new forest is not necessary better, but it is adapted to a different set of conditions. The same happens in other things.

Re blue/red states - that distinction is not particularly apt. All the states (except Minn) were red in 1984 and most of the south was blue in 1976 & 1992. Different ones are red and blue depending on the circumstances. There have been many changes. My native state of Wisconsin was blue, but has been deregulating and turning purple. My current state of Virginia is red, but also turning a little purple. Beyond that, the blue states tend to be the ones with more established industry. They are currently producing more of the GDP, but most of the GROWTH is coming from the south and west, which are more likely to be red. Consider the auto industry in Michigan and Ohio versus the one in Tennessee and Kentucky.

Established interests tend to have more regulation. They want to protect what they have. It just makes it harder for new people and ideas. There is a trade off between innovation and stability.

BillS

Where does Citgo get most of its oil? An inefficient firm can make lots of money if it receives subsidized or below market raw materials or credit. It is not really earning that money, however.

Health care is a different issue. I would not object to a European style health care because I spend little time being sick and I do not like the special treatment. Most Americans are too big cry babies to accept that. They may have to, but they will complain.

Posted by: Jack at January 19, 2007 9:47 AM
Comment #203960

Regarding Singapore: While banking is central to its economy now, it is moving quickly to become the world’s capital of biological research and to a lessen extent in the other sciences. The US has lost more scientists to Singapore than to all other countries combined since 2000. NSF has projected that Singapore will overtake the US in the biological sciences in the next 5 - 10 years. The value of the resulting patents will make the banking industry look like chump change in Singapore in the future. The US’ loss of preeminence in the sciences is and will be devastating economically.

Posted by: Dr Poshek at January 19, 2007 10:25 AM
Comment #203963

Loyal opposition

Indigenous populations may be small because of genocide. They were the majority before there gene pool was eliminated. The history of the geographical region we now call the West Indies is a great example. Small numbers is hardly an legitimate reason to exclude them from considerations

Jack

I certainly agree with you that some cultures are destructive—none more so than European cultures. On the stage of history, you would be hard pressed to find a more collectively destructive group of people. That they would plunder there own shouldn’t surprise anyone.

I find it interesting that you would bring up Mali as a counterpoint. If you knew it’s history, I would be alot of money you might try to find a different example. Mali is poor now—because of the consequences of colonialization (by the French). Look at its pre-mulsim history AND it very prosperous history as it’s people converted to Islam under the influence of the Great Leader Mansa Musa! Absent the European prsence, the Kingdom of Mali was a flourishing rich culture (it was not a democracy then) that would rival any cultural high-point in European history. There are numerous

It was very nice to see South Africa includes in the economic report you cited. Consider what it’s “marks” might have been when Aparthied was the law of land.

Loyal Opposition, try to apply your arguments regarding indigineous people to South Africa

Posted by: Kim-Sue at January 19, 2007 10:38 AM
Comment #203982

Jack
Always with the qualifiers. When Cit-go makes their bank deposit the bank does not care much if the “earned it” by your standards. If the goal of corporations is to earn money they are achieving that goal.

Posted by: BillS at January 19, 2007 12:16 PM
Comment #203994

Jack
I am a bit surprised that you support European style healthcare. That makes you more “left ” then I.In the European system the government owns the delivery system. I would like us to try single-payer where the system remains private but the bills are paid only by the government. This would provide cost and quality controls. It would be less expensive because of that and produce even more savings by getting insurance companies out of the equation. Insurance is NOT healthcare. Another area the gov. would enter is by subsidizing the education of healthcare workers,Dr. Nurses etc. plus regulation of the mal-practice insurance industry.
I have often wondered a what really free market healthcare system would look like. Stripping the AMA of its monopoly exemptions and licenseing authority,requiring and allowing providers to post prices and advertize,maybe even bid. It sure would look different.

Posted by: BillS at January 19, 2007 2:05 PM
Comment #203996

BillS

ALL firms would like to earn money like Citgo does. I sure would. Give me my raw material at below market prices and let me sell it for what I can get. Then I could be a business genius.

Think of it from the owner perspective. YOu have a firm. It costs you money out of your pocket to run the business. You put in $10 and get back $5 and call that $5 profit. Are you happy?

It is not successful in the sense that it survives with the very strong subsidies from the state. If you include state sponsorship and subsidy in successful, I suppose they are. But most of the time countries cannot afford such success. With Citgo, check back in a few years.

Kim-sue

Mali is relatively poorer, but not really poorer. It is like that with many non-western society. The wigwams, mud huts etc people lived in were more picturesque than the trailer, but given the choice people prefer the trailer.

Re Mali - it was a great culture for its time and place, but we do not need to overestimate it.

Posted by: Jack at January 19, 2007 2:23 PM
Comment #204020

Jack
Getting a better deal on materials is a fundemental and legitamate business goal,is it not? This is all beside the point when we are talking about socialist enterprises the usual goal is not to earn profit,it is to provide services. Even breaking even is an achievement. example: A municiple power company. They usually provide cheaper and as reliable power to their market most often without subsidy. Many other enterprises,say a transit district do require subsidies.The national energy company of France is not intended to be a revenue source nor is our postal service. It is kind of an apples/oranges comparison to use profit as a comparison. Service level,reliability,efficincy are better criteria.I will agree that private enterpises are generally more efficient but their goal is not the same.

I read an interesting historical footnote. Seems that Crosus(forgive spelling),the richest man in Rome had a private slave fire dept. They would show up with their equiptment when someone’s villa was on fire and then start negotiating price. I think we should stick to the socialist model myself.

Posted by: BillS at January 19, 2007 4:43 PM
Comment #204021

you said, lets look at our apalling infant mortality rate and face the fact that unless we do something soon about healthcare life expectancy will start decreasing for the first time in our history.

The Infant Mortality Rate has more to do with personal decisions by the mother and technology that allows us the luxury of delivering a baby as young as 24 weeks than it does the quality of healthcare. Medicare covers prenatal care for everyone unable to afford insurance. Is our healthcare system perfect? No. Was it designed to take care of people who have information at their fingertips yet, refuse to follow simple healthy guidelines? No. People have to take more interest in their OWN PERSONAL health. People have to (here is the part that pisses off liberals) take some responsibility for their indulgences in life.

Posted by: ed at January 19, 2007 4:45 PM
Comment #204026

BillS

That is Crassus. He was the richest man in Rome in his time. Croessus was the richest man in the Med world at his time, but he was the King of Lydia about 500 years before Crassus was born. He ended badly and so did Crassus (the Parthians poured molten gold down his throat). “Never judge whether a man is happy until you see him dead,” was the lesson.

Crassus is more like a socialist in that he employs coercion.

The oil industry in Venezula is becomming more and more corrupt and inefficient. If that is the goal, they are doing a good job at Citgo. But it seems to me that even if profit is not your goal, you still might want to minimize corruption.

Posted by: Jack at January 19, 2007 4:57 PM
Comment #204080

ed
You are mistaken somewhat. Of course there is some personal responsibility issues but to assign all or most of the problem to that you must be saying that young American mothers are more thoughtless than mothers in Cuba,Canada,all but a few European countries.Most of these other countries also take extrordinary measures to save pre-mature babies. Also the states that show higher rates are states that provide less access to prenatal care. Personally, I find it shameful that our rate is higher than Cuba’s .

Posted by: BillS at January 19, 2007 9:40 PM
Comment #204081

Jack
Corruption is certainly not limited to socialism niether is coercion.Thanks for the historical input. I read that some time ago. Regards Bill

Posted by: BillS at January 19, 2007 9:44 PM
Comment #204111

BillS,
We have a huge drug problem in this country compared to Cuba, Canada, and all but a few European countries. Many young American women don’t take the time to get pre-natal care. That is a fact. Even when it is free. You can lead a horse to water as they say. And no, all those countries don’t take the extraordinary lengths that we do here in the States. It would bankrupt their socialist style of healthcare.

Posted by: ed at January 20, 2007 1:11 AM
Comment #204152

ed
France for one does take extra measures. I am not denying the need for more personal responsibilty but we could do a better job with education ,outreach etc. even drug rehab. It would not only save babies it would be cost effective.

Posted by: BillS at January 20, 2007 12:40 PM
Comment #204276

Jack,

So you are now taking Mali out of your success column?

As far as overestimating the greatness of the kingdom of Mali, I’m not surprised you would make a comment like that—I would expect no less from an individual of such equivocal scholarship.

If you would like me to get you a reading list on African history before any European ever set foot on the continent (including the that of Mali) let me know. Your conclusions and rebuttals are as shallow and incomplete as always—an indication of “feigned intellect.”

Posted by: Kim-Sue at January 21, 2007 9:34 AM
Comment #204356

Kim Sue

You can think what you want about my scholarship. I do all right for myself with my limited intelligence. I would point out, however, they you read MY columns. Who is the bigger fool, the fool or the one following him?

I would be interested in your list of primary sources written in sub-Saharan African languages before the coming of any Europeans.

Posted by: Jack at January 21, 2007 11:04 PM
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