Eastern Europe has learned what America has forgotten:  Freedom Is Still the Best Policy

…World leaders have forgotten how the collapse of Wall Street in 1929 developed into a world-wide depression. It happened not thanks to market failures but as a result of mistakes made by governments which tried to protect their national economies and markets. The market was not allowed to make its corrections. Government interventions only prolonged the crisis.

We may hope that, even as we see several bad signs of neo-interventionist attitude, all the mistakes of the 1930s will not be repeated. But it is clear that the tide has turned again. Capitalism has been declared dead, Marx is honored, and the invisible hand of the market is blamed for all failures.

This is not fair. Actually it is not markets that have failed but governments, which did not fulfill their role of the “visible hand” — creating and guaranteeing market rules. Weak regulation of the banking sector and extensive lending, encouraged by governments, are examples of this failure.

Eastern Europe’s experience:

During the 1990s, the most radical and successful reforms came from the three Baltic States: Estonia, Latvia and Lithuania. Open markets, economic liberalization, fast privatization, stable currencies, flat tax rates — all of these became the trademark of the “Baltic Tigers.” Early in the new millennium, the Baltic countries started to enjoy the fruits of their reforms. Economic growth reached 11% to 12% per year. Living standards rose
to 60% to 70% of the European average from 15% to 20% in 1992.

A good idea is a terrible thing to waste.

H/T Freedom Politics

Advertisements