New York Times Picks Up State Of World Liberty Story

Remember how we broke the story on the State of World Liberty and pretty much all of Eastern Europe picked it up?

Well, now the New York Times is doing so. They put an article out on September 5 about Estonia’s ranking in Nick Wilson’s index, and the reason for it and what it’s done to Estonia. I think this is pretty much an airtight case against socialism, too.

Since you have to register for the article, I found it reprinted here. But here’s the relevant portions:

Economists call Estonia the Baltic Tiger, the sequel to the Celtic Tiger as Europe’s success story, and its policies are more radical than Ireland’s. On this year’s State of World Liberty Index, a ranking of countries by their economic and political freedom, Estonia is in first place, just ahead of Ireland and seven places ahead of the U.S. (North Korea comes in last at 159th.)

It transformed itself from an isolated, impoverished part of the Soviet Union thanks to a former prime minister, Mart Laar, a history teacher who took office not long after Estonia was liberated. He was 32 years old and had read just one book on economics: “Free to Choose,” by Milton Friedman, which he liked especially because he knew Friedman was despised by the Soviets.

Laar was politically naïve enough to put the theories into practice. Instead of worrying about winning trade wars, he unilaterally disarmed by abolishing almost all tariffs. He welcomed foreign investors and privatized most government functions (with the help of a privatization czar who had formerly been the manager of the Swedish pop group Abba). He drastically cut taxes on businesses and individuals, instituting a simple flat income tax of 26 percent.

These reforms were barely approved by the legislature amid warnings of disaster: huge budget deficits, legions of factory workers and farmers who would lose out to foreign competition. But today the chief concerns are what to do with the budget surplus and how to deal with a labor shortage.

It’s obvious: socialism can’t hold a candle to the free market insofar as the creation of wealth, or its equitable distribution, goes. They have no argument.

posted Sep 9th, 2006 by Stuart Richards
  • Devious David

    Well said and good article, Stuart!

    I was reading an unrelated article the other day that suggested the idea that as globalization continues, people will increasingly choose countries & jurisdictions that are more favorable to liberty, in particular economic liberty via low taxes and regulation. Countries will have to compete with one another in order to survive. We see some evidence of this with Carribean based hedge funds and Hong Kong, Singapore, etc. Estonia is not exactly free-marketeer paradise, but it is certainly a hot prospect.

    Needless to say, the New World Order is in direct contravention to this. It would be a monopoly on monopolies. Part of me thinks that such a NWO idea is actually untenable for any amount of time due to inviolable market forces. There would be too much infighting and factionalization amongst other problems. That doesn’t mean there would be mass suffering in the mean time and grossly inhibited potential.

  • http://freelancify.com Nigel Watt

    Awesome that the US press is picking this up.

  • getreal

    The index is still heavily weighted on economic issues and not civil liberties. Only political freedom, press freedom and economics issues are really considered. New Zealand legalized prostitution but that doesn’t weight in at all. The US makes it illegal. Doesn’t that count? NZ has civil unions for any couple that wants it: gay or straight. It doesn’t count in this index. The US is artificially high in the index because of it still ignoring most civil freedom issues.

  • http://www.stateofworldliberty.org Nick Wilson

    Getreal,

    As I have said to others many times before, it is impossible at this moment for me to create a completely comprehensive index, as the organization is still coming together and as there are no published indexes right now with vice laws factored in. Because all of my information comes from other freedom indices, I am beholden to the areas which they cover.

    Also, it is very difficult to interpret some vice laws from an objective perspective; for example, prostitution is legal in Thailand and the Phillipines, but it’s hard to call the widespread human trafficking, child prostitution and sex slavery that also exists acceptable to lovers of freedom. Intrinsic to a comprehensive legalization of prostitution would be a legal apparatus to protect sex workers from these things; thus it is difficult to interpret.

    If you can make a better index, go for it. This is about getting the information out there, and if someone takes the idea and makes a better one, more power to them.

  • http://www.stateofworldliberty.org Nick Wilson

    And by the way, the gay civil unions thing is factored into the Freedom House results. Unfortunately, the Freedom House index ranks countries 1-7, with no decimals, and thus there is little distinction and a much higher margin of error for countries with the same ranking; thus, the US and New Zealand have the same score in the index. (However, in the SoWL Index, when press freedom was factored in, NZ had a higher personal/political freedom score that the US. NZ ranked lower than the US overall primarily because it has a higher personal income tax rate and a bigger proportional government size than the US.)

  • disinter

    If they “hate us for our freedoms” as Bush would have you believe, then why isn’t the boogie-man attacking Estonia?

  • Devious David

    So, maybe one answer is to decrease the granularity of the Freedom House index?

  • Stuart Richards

    Well, you’ll have to talk to the folks at Freedom House for that… Nick’s not in charge of them. He just uses their stats.

  • Simon

    As as New Zealander i’d like to say that our society isn’t free.

    Our newspapers are 99% owned by rupert murdoch (newscorp).

    We are a constitutional monarchy – without a constitution…

    The privatization of our assets was basically the sale of monopolies to foreign investors. I wouldn’t be surprised if Estonia is going to get screwed over like new zealand was.

    The NZ quality of life has dropped dramatically… and now most of our country is getting bought by foreign millionaires…

    There is a small movement building.. towards community based governance which hopefully leads towards a more responsible form of government.

    My 2c.

  • http://www.stateofworldliberty.org Nick Wilson

    Mike: “If they “hate us for our freedoms” as Bush would have you believe, then why isn’t the boogie-man attacking Estonia?”

    Probably because Estonia is not trying to impose their policies on those countries, but that’s just a guess.

    The war between Islam and America and the west, as well as the less talked about economic struggle between Latin America and America is primarily about globalization – more specifically between us, who are trying to foist globalization on everyone, and those who are trying to conserve their way of life and resisting the globalization, corporatization and Americanization that has captured, for example, East Asia. While the anti-globalists in both cases have strong points and valid reason to critique the Americanization of everything, they are regressing into fascism and socialism in response and thus ignoring global economic realities. This leads to poverty, which leads to more discontentment, jealousy and hatred of the West. Thus, cyclical conflict.

  • http://member.netlink.com.au/~peterl P.M.Lawrence

    There’s something wrong with your page generation. It mistakenly said that I am using Internet Explorer. I’m not, I’m using Arachne.

  • http://member.netlink.com.au/~peterl P.M.Lawrence

    Simon, of course New Zealand has a constitution – just not a written one, just like the UK.

    You’re right about the likely buy out by outsiders. It’s what happens when outside fiat money can be used to buy things up – it’s not really free trade when that kind of purely nominal capital inflow occurs. However the risk is much greater when there is also local inflation, a tendency to “sell the family silver”.

  • HippyChimp

    Question of the day… What’s Estonia’s immigration policy?

  • disinter

    HappyChimp,

    It is restricted, by not if you are coming from the US.

  • matt

    Fiat money bs. The fact is even with backed currency NZ is a good place to invest because they have free markets and have large growth potential. Nothing wrong with foreign investment, it is a good thing creates jobs and rises the standard of living for all.I don’t understand how we have so many macro-economic ignorant people on a libertarian blog.