Economic Freedom
Published by Yazad Jal January 6th, 2005 in EconomicsMany friends look upon economic freedom as some luxury. “India needs social infrastructure more. Luxuries later”. Unfortunately, they do not know what economic freedom really means. David Boaz reminds us
We must not forget the real importance of economic freedom. Besides the value of freedom itself, economic freedom leads to economic growth. And growth is not just an abstract concept. It means that women have running water, rather than having to carry water from a well that may be miles away. It means enough food for children. It means medical care and dramatically lower rates of infant mortality.The hurricanes that devastated Haiti earlier this year and the Asian tsunamis last week both reminded us of the real costs of poverty. It is the lack of wealth that forced so many people to live in homes that could be easily destroyed by hurricanes and tsunamis. Economic freedom means more wealth for the whole society, which means better-built homes and better warning systems in case of disaster.
With the new year, Heritage Foundation has brought out it’s 2005 Index of Economic Freedom. India is “mostly unfree” with a rank of 118 (out of 161). More on India here. The Indian Express has a story on it. Heritage is not the only organisation that comes out with an economic freedom index. Freedom House and Free the World (a group led by Canada’s Fraser Institute) are the others. We see freedom even in the fact that there are multiple rating agencies and not one monopolist!
Centre for Civil Society published an Indian version of Fraser Institute’s Economic Freedom of the World 2004. The introduction is excellent. Read it (pdf file)!
Some years back (when I worked at CCS), I’d published an article in the Economic Times on economic freedom. Since then, I’ve noticed that we’re moving up the scale, but not fast enough. One indicator we could use is the impact of and the recovery from natural disasters. Japan and the US are hit by numerous earthquakes and tsunamis. The death toll is generally in single digits. Not 1,50,000 and counting. Prosperity and economic freedom saves lives too. I don’t think we can wish it away as a luxury any longer.
Thanks MadMan for sending the Heritage link via email
10 Responses to “Economic Freedom”
- 1 Trackback on Jan 7th, 2005 at 3:24 pm
- 2 Trackback on Jan 7th, 2005 at 4:34 pm
- 3 Trackback on Jan 13th, 2005 at 7:32 am
Yazad,
I have not yet read your op-ed in the Times.
But economic freedom is too abstract an idea for the masses to grasp.
Like Gandhi did, there needs to be a simple way for a common man to (a) understand what it means and (b) a simple way to fight for it.
Current discussion on economic freedom is not unlike sessions of the Indian National Congress under Hume and others.
Yes. One of the conclusions that we came to very soon. Read Parth’s intro (pdf file) to the Indian edition of the Econ Freedom book. He talks of livelihood issues amongst the urban poor. (cycle rickshaw wallahs in Delhi)
what is’economic freedom’? simply this: as adam smith put it - “according to the SYSTEM OF NATURAL LIBERTY every man is left PERFECTLY FREE to pursue his own ends in his own way, SO LONG AS HE DOES NOT VIOLATE THE LAWS OF JUSTICE.”
the ’system’ he referred to, as well as ‘the laws of justice’ he talked about, was the COMMON LAW. under the common law, private property was inviolate. indian socialist legislators and other ‘democratic despots’ have used LEGISLATION worldwide to take away the NATURAL LIBERTY that private property rights afforded human beings under the common law.
a good way to tell ordinary indians what ‘economic freedom’ means is to say: suppose the customs deptt was abolished and the entire land mass of india became the world’s largest duty free area, would not even the paanwallah benefit? if all licencing was abolished and all LEGISLATION ignored by the common courts - and there was gambling (in casinos - private property), and prosptitution (in brothels - private property), erotic dance, pornography, ganja and cocaine apart from the ‘duty free India’ we talked about - that would truly be an economically free, prosperous and ‘moral’ india, living in NATURAL JUSTICE UNDER THE COMMON LAW.
And what is “economic freedom”? I contend it is nothing but the freedom to pursue our unlimited desires within the bounds of limited resources. Specifically, the primary restriction on economic freedom is competition for limited resources. In this competition, we must deal with those who will use extra-legal means and not just with those who willingly agree to abide by the “laws of justice”. May I suggest that the the solution to the problem of economic freedom - is government!
What happens when government becomes the extra-legal player with a monopoly to set the rules, and the right to soveriegn immunity?
Guatam,
Without said monopoly, a government is useless. Balance and Agreement are the keys. We collectively agree on the correct balance, and we agree to act in accordance with the agreement (Law). If the system becomes unbalanced, the agreement fails, and economy becomes stagnant (or worse) until such time as a new agreement is reached.
Testing comments