Does economic freedom make a country better?

[Sjalq]

Since the previous thread was hijacked, here is the main page for the Heritage foundation.

In short their argument is more respect for property and more economic manoeuvre space creates a lot of wealth.

Does this mean socialism and high taxes to do whatever someone with a "plan" has come up with is bad idea?
YES!

Does it mean that "generally" regulation is a bad idea?
Probably.

Does it mean we should close the police stations and embrace free market justice provision?
No. The site contains the facts, don't extrapolate what might or might not be a workable theory and attack or defend that.

http://www.heritage.org/index/Ranking

Here are the top 11 as ranked for economic freedom, all of them at present are really developed places.

• Honk Kong
• Singapore
• Australia
• New Zealand
• Switzerland
• Canada
• Ireland
• Denmark
• United States
• Bahrain
• Chile

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[Fakeman]

I'm not sure how that list of success stories supports your contention that regulation is probably a bad idea in general. Most or all of those countries would have large numbers of regulations, and a few are even popularly described as 'socialist' in some of their policies (e.g. healthcare) or just in general.

[The_JMiner]

The biggest problem with regulation is that there is always a loop hole or way around it. So why even have regulation?!

[compro01]

i find it amusing that socialist canada ranks higher than the US.

[evoorhees]

i find it amusing that socialist canada ranks higher than the US.

Essentially, that list is an inverse ranking of socialism. So, it is not quite correct to say that "socialist Canada is higher than the US," but instead that the US is demonstrably more socialist even than Canada. 

Pretty sad =(

[HappyFunnyFoo]

Socialism is good.  Regulation is great.  The reason the U.S. is in a mess is due to the Futures and Commodities Modernization Act of 2000 creating a completely unregulated derivatives, CDO, CDS, and MBS market, which catalyzed the real estate boom and allowed lots of stupid banks to loan to greedy Americans to buy homes that were two sizes too large for their budget.  The deleveraging of this mess is what's caused the situation we're in now.  If we had regulations in place requiring more disclosure of information or restrictions on the scope of a collateralized debt obligation and mortgage-backed security, this whole situation wouldn't have occurred.

For more information youtube Khan Academy, as I'm too lazy to explain in detail basic economics to clueless fifth grade-level tea partiers here.

Tchau

[The Script]

Socialism is good.  Regulation is great.  The reason the U.S. is in a mess is due to the Futures and Commodities Modernization Act of 2000 creating a completely unregulated derivatives, CDO, CDS, and MBS market, which catalyzed the real estate boom and allowed lots of stupid banks to loan to greedy Americans to buy homes that were two sizes too large for their budget.  The deleveraging of this mess is what's caused the situation we're in now.  If we had regulations in place requiring more disclosure of information or restrictions on the scope of a collateralized debt obligation and mortgage-backed security, this whole situation wouldn't have occurred.

For more information youtube Khan Academy, as I'm too lazy to explain in detail basic economics to clueless fifth grade-level tea partiers here.

Tchau

Yet another poster, who, lacking the ability to make logical arguments, resorts to baseless ad hominem attacks.  If you actually bother to engage in discussion with people on this forum you'll find there are very few tea party members.  There are, however, quite a few arrogant assholes, like you.

[neptop]

It heavily depends on what better means.
Also I am not sure if you could still call it a country if something like that happens.

I don't think an economy or a certain ideology or believe can make something better. In the end it's about what the people do. If they are like "Whoa, I am a Socialist. Lets kill everyone who isn't" it won't be any better. If someone says "Whoa, I am a Socialist. Lets work on the problems our society has." it will be better.

You can of course replace socialist with Liberal, Anarchist, Muslim, Christ, ... you name it.

I already stated this in another thread, where someone asks whether Bitcoin will solve all problems we have. It always depends on how people act and use what we have.

The funny thing is that this is what most ideologies (and by that I mean what a person believes to be true not what various people call liberalism/communism/...) seem to have in common when you ask the right person. People in general strive for doing the right thing, but with naming ideologies it just causes people to work against each other. See day to day politics.

I know, you didn't ask about ideologies, but I already answered it I guess. It won't magically cause anything. It depends on a lot of factors, so things can be hard to predict. It also depends on what most people in that specific country think. So I guess the outcome would be completly different on each continent.

It's like some people believe everyone would somehow become a violent murderer if there wasn't any police, but that's nonsense isn't it? It's like most people in a chat are nice, even though they are pretty anonymous.

I really like to talk with people who think their ideology is the best. They really think about how they can make things better, but it makes me sad that even though they actually share the same goals they build some kind of wall between each other. Just working together could make things better. I mean everyone knows that we should globally work on stuff like clean supply of energy. See the internet or the ISS. Both are great projects that couldn't be solved if it had been tucked to a certain ideology.

[Fakeman]

i find it amusing that socialist canada ranks higher than the US.

Essentially, that list is an inverse ranking of socialism. So, it is not quite correct to say that "socialist Canada is higher than the US," but instead that the US is demonstrably more socialist even than Canada. 

Pretty sad =(

I don't think that's quite accurate. What it implies is that "socialism", as the term is applied to Canada (or say Denmark) is not necessarily at odds with "economic freedom" as this particular group measures it.

[compro01]

i find it amusing that socialist canada ranks higher than the US.

Essentially, that list is an inverse ranking of socialism. So, it is not quite correct to say that "socialist Canada is higher than the US," but instead that the US is demonstrably more socialist even than Canada. 

Pretty sad =(

that depends on whether you use a screwy definition of "socialism".  socialism can be highly beneficial to economic freedom.

for example, single-payer healthcare improves job mobility, which i would consider a key aspect of economic freedom, rather than being tied to a company due to the need for health insurance.

[amincd]

Yes economic freedom definitely makes a country better. Note economic freedom doesn't mean the abolition of government, it means a limited government that provides law and order to protect people's liberty.

The reason the U.S. is in a mess is due to the Futures and Commodities Modernization Act of 2000 creating a completely unregulated derivatives, CDO, CDS, and MBS market,

That had absolutely nothing to do with. Securitization of debt began in the 70s, and has gradually became more common, in not just residential real estate mortgages, but commercial real estate mortgages and credit card debt as well. Unlike these other sectors, there were active measures by the government to promote residential mortgage issuance, which is what led to the bubble that led to the crash.

The bubble was predicted by Austrian economists like Peter Schiff and Ron Paul. Here's Peter Schiff warning every one in 2006 and 2007:

http://www.youtube.com/watch?v=2I0QN-FYkpw

He knew there would be a crash because he understands how a market works, and that regulations never help.

for example, single-payer healthcare improves job mobility, which i would consider a key aspect of economic freedom, rather than being tied to a company due to the need for health insurance.

Economic freedom isn't the same thing as a metaphor like 'financial freedom'. The latter is actually more like security. Economic freedom means actual liberty: the freedom to contract and keep the rewards of one's own industry. That's the chief meaning of freedom. Any tax payer funded program will necessarily reduce liberty.

I'll also add that the advent of universal health care in the Western world, and Medicare in the US, has corresponded with a rapid increase in spending on health care as a percentage of GDP. The same pattern is seen in the education sector, with education spending as a percentage of GDP skyrocketing as government began spending more on it.

[Murwa]

Hey i though USA is socialist ?

Am in the wrong forum ?

[shady financier]

Does setting fire to your house make it warmer? Yes, t least at first.

Anyway in todays America 'regulations' are enforced by the people being regulated. I don't think that's any good.

My opinion is that economic freedom means nothing without political freedom, and political freedom means nothing if economic power is not prevented from neutralizing political freedom.

[shady financier]

i find it amusing that socialist canada ranks higher than the US.

Essentially, that list is an inverse ranking of socialism. So, it is not quite correct to say that "socialist Canada is higher than the US," but instead that the US is demonstrably more socialist even than Canada. 

Pretty sad =(

that depends on whether you use a screwy definition of "socialism".  socialism can be highly beneficial to economic freedom.

for example, single-payer healthcare improves job mobility, which i would consider a key aspect of economic freedom, rather than being tied to a company due to the need for health insurance.

I gree with your point. Always puzzles me how people that oppose healthcare reform in the US proclaim to be all about economic freedom but are happy to see American businesses shaken-down and weighed down by insurance companies and big pharma. They don't mind the health insurance insdustry making a giant claim on peoples wealth, which they then spend not in the real economy but in the same byzantine instruments that everyone then has to run around and server (through bail-outs and the crowding out of real enterprise).

[Grinder]

The reason why this discussion is not getting anywhere is that libertarians and socialists are not going to agree on what makes a country better. Libertarians value economic freedom over everything else, so obviously more economic freedom will make it better. Socialists on the other hand value equality and social security over everything else. Economic freedom will reduce that for the least resourceful part of the population, so they will think it makes a country worse.

[HappyFunnyFoo]

[/quote]

Yet another poster, who, lacking the ability to make logical arguments, resorts to baseless ad hominem attacks.  If you actually bother to engage in discussion with people on this forum you'll find there are very few tea party members.  There are, however, quite a few arrogant assholes, like you.
[/quote]

Calling Tea Partiers ignorant, stupid, or economically at a fifth grade level isn't an ad hominem attack, though.    Go YouTube some Khan Academy videos on basic economics, then re-read my post and try commenting again.  Also, you got mad enough that you forgot to address my other points in the post - I take it you agree with me?

[BBanzai]

Libertarians may be defined as valuing economic freedom, but they think of themselves as valuing freedom.  Period.  Being free to make your own choices as an adult, being free to succeed or fail by your own merits.   The biggest divergence between freedom and socialism is all about freedom to fail.  Freedom to suffer the consequences of your own decisions as well as reap the benefits of your choices.  Freedom from being punished if you choose to do something that may result in your death.   The only reason we know what food to eat, as a species, is because our species is willing to risk our personal lives by tasting something new. Our noses don't work very well.  We are too "conscious" to rely on instinct anymore.  So we pick a plant, eat it, see what happens.  Pick an animal, try to kill it, cook it, eat it, see what happens.  Those of us who died in the process did not fail as human beings, they exemplified us.  The risk-takers.  The blind-leapers.  Taking away an adult's freedom to fail is tantamount to keeping them a child, a pet, a slave, indefinitely.   Whether its you or someone you have never met.  Taking away their freedom to succeed is an act of envy, of fear, of aggression.  This isn't two unrelated actions, its the same action.

[Sjalq]

Socialism is good.  Regulation is great.  The reason the U.S. is in a mess is due to the Futures and Commodities Modernization Act of 2000 creating a completely unregulated derivatives, CDO, CDS, and MBS market, which catalyzed the real estate boom and allowed lots of stupid banks to loan to greedy Americans to buy homes that were two sizes too large for their budget.  The deleveraging of this mess is what's caused the situation we're in now.  If we had regulations in place requiring more disclosure of information or restrictions on the scope of a collateralized debt obligation and mortgage-backed security, this whole situation wouldn't have occurred.

For more information youtube Khan Academy, as I'm too lazy to explain in detail basic economics to clueless fifth grade-level tea partiers here.

Tchau

OK, I will explain briefly why I disagree with your take on things and on Salman Khan's take on things. If you do not agree with me I expect the same respect I show you and do not resort to name calling, it is unnecessary and polarises the argument.

Socialism is good:
Socialism appears good, the most extreme forms of socialism have been Soviet Russia and Communist China. Both those places only improved as people were allowed to engage in free economic activity. The one had to collapse before things got any better, the other is becoming increasingly free and as a result increasingly prosperous.

A less extreme example of why socialism is not good is Sweden. Despite being held up as the shining light of socialism their economy was built on free market principles until the 50s when socialists gained power and began a crazy tax regimen on the rich and a highly managed society. In the early 90s they realized the damage this was doing and starting privatising many industries and restructured the tax system to benefit the specific people who paid the tax initially.

Regulation is great:
I agree, regulation is great if you are an incumbent corporation. Contrary to what many people think, regulatory bodies have almost all been hijacked to protect the very companies they were meant to protect. I live in South Africa and here we have 5 cellular companies who basically dictate to the regulator who must be let into their little ecosystem. This undermines the one regulation that cannot be hijacked, competition on cost and product quality in the absence of such regulation.

Ponder this, was it the treasury and the Fed that bailed out the banks in the US after they failed? These are supposed to be the bodies looking out for the people, and here they are giving their friends $1.4 Trillion.

The reason the U.S. is in a mess is due to the Futures and Commodities Modernization Act of 2000 creating a completely unregulated derivatives, CDO, CDS, and MBS market, which catalyzed the real estate boom and allowed lots of stupid banks to loan to greedy Americans to buy homes that were two sizes too large for their budget.  The deleveraging of this mess is what's caused the situation we're in now.  If we had regulations in place requiring more disclosure of information or restrictions on the scope of a collateralized debt obligation and mortgage-backed security, this whole situation wouldn't have occurred.

I take it you mention this in reference to Salman Khan's explanation. I have an enormous amount of respect for Mr. Khan but in this instance I believe he is missing a few crucial elements.
Debt based money
There is really no limit to the money supply in the United States. Fractional reserves are still in place but have long since stopped acting as a restraint on the increase in credit. The primary beneficiaries of the debt based money system is the banks. They have access to low rate credit that allows them to purchase real world goods. The higher up in the system you go, the cheaper the credit becomes.

This creates the very dubious situation where banks can create very large amounts of money that then syphon into the economy, jacking up the prices for the goods it's meant to purchase. In the most recent example it was housing, there was a large amount of credit available for the purchasing of homes which lifted the prices, started the mania and eventually reached the point where people were unable to service the debt. This lead to bankruptcies, defaults and the whole system contracting in on itself again. This time not because the credit was no longer available but because people could no longer produce fast enough to service the debt.

"Deregulation"
The thing people never mention here are that there are controls AND privileges under regulation. When you hear about "deregulation" it is hardly ever taking away of privileges, only controls. Banks are EXTREMELY privileged through regulation they can make money out of basically nothing for Pete's sake!). What libertarians are saying is remove the controls AND the privileges. What people hear is keep the government privileges in place and remove only the restrains. Without the government privilege to create money the big banks will not last the end of the year.

These products have existed for a long time
CDO's were first created in 1987.
CDS are very normal, very necessary contracts that act as insurance against defaults, either private or governmental. Imagine trying to invest in a poor country without taking out insurance against irresponsible government action? These have exsited since the early 1990s
MBS have existed since 1981.
All these things could not have caused the damage they did if their value was not implicitly backed by the easy money of the federal reserve. The people trading and creating them knew they could get away with abusing them because the US govt would step up and fill the gap. If that knowledge was not there, they would never have reached the pandemic level they did.

Lastly I would like to point out that it was libertarian economists who were making the loudest noise about this when it was happening and were laughed at.
http://www.youtube.com/watch?v=2I0QN-FYkpw

[ffuentes]

The socialism fail does not implying deregulation is ever good. Remember that do exist bad regulation and good regulation.

Economic development is not all. Chile is the only country which is not already "developed" in this list, despite good macroeconomic numbers it's a shit and I know because I live there (in addition, Argentinean cost of life and GDP/per capita is not worse than). Although in your list there are some countries which are "free" but aren't "austrian" as Denmark or Switzerland.

[Sjalq]

If you don't like Chile, you should maybe you should try the countries further down the list.

Those countries come from the Heritage Foundation's economic freedom index. They are quite "Austrian" compared to the countries further down the list.