Développement: C’est la liberté, imbécile! (It’s the freedom, stupid!)

Economic freedomHongKong, Singapour, Irlande, Australie, Etats-Unis, Nouvelle Zélande, Canada, Royaume-Uni, dans les dix premières places …

Chine, Venezuela, Cuba, Corée du nord, qui ferment la marche …

A l’heure où Chirak III multiplie les voyages de VRP tyrannophile, demande à la grande distribution de « faire des efforts » sur les prix, condamne la recherche sur les OGM (qui permettent de se passer de pesticides) ou se fait faire sur mesure de nouveaux index de développement ….

Petit correctif, avec la publication de l’Index de liberté économique du WSJ, qui, avec les pays anglosaxons ou leurs anciennes colonies trustant les premières places à la fois de la liberté économique et de la prospérité et la France péniblement dans les 50 premiers, confirme pour la énième fois que la vraie clé du développement n’est pas tant du côté des éternels investissements en gros projets d’infrastructure et d’éducation que de la simple… liberté!

The Real Key to Development
Mary Anastasia O’Grady
The Wall Street Journal
January 15, 2008

Are the world’s impoverished masses destined to live lives of permanent misery unless rich countries transfer wealth for spending on education and infrastructure? You might think so if your gurus on development economics earn their bread and butter « lending » at the World Bank. Education and infrastructure « investment » are two of the Bank’s favorite development themes. Yet the evidence is piling up that neither government nor multilateral spending on education and infrastructure are key to development. To move out of poverty, countries instead need fast growth; and to get that they need to unleash the animal spirits of entrepreneurs. Empirical support for this view is presented again this year in The Heritage Foundation/The Wall Street Journal Index of Economic Freedom, released today. In its 14th edition, the annual survey grades countries on a combination of factors including property rights protection, tax rates, government intervention in the economy, monetary, fiscal and trade policy, and business freedom. The nearby table shows the 2008 rankings but doesn’t tell the whole story. The Index also reports that the freest 20% of the world’s economies have twice the per capita income of those in the second quintile and five times that of the least-free 20%. In other words, freedom and prosperity are highly correlated. The 2008 Index finds that while global economic liberty did not expand this year, it also did not contract. The average freedom score for the 157 countries ranked is nearly the same as last year, which was the second highest since the Index’s inception. This is somewhat of an achievement considering the rising protectionist and anti-immigration sentiment in the U.S., the uncertainty created by spiking global energy prices, Al Gore’s highly effective fear mongering about global warming, and the continuing threat of the Islamic jihad. Former British colonies in Asia took three of the top five places this year. But half of the top 20 freest economies in the world are in Europe. Of the five regions surveyed, Europe is the most free, continuing to advance this year with tax cuts and other business-friendly reforms. The only other region to score above the world average this year is the Americas, which is helped by strong performers like the U.S., Canada, Chile and El Salvador. At the other end of the scale Argentina, Bolivia, Haiti, Venezuela and Cuba dragged down the regional average. Although overall global economic liberty did not expand, there were a few stars. Egypt was the most improved economy in the world, implementing major changes to its tax policies and business regulation environment and jumping to number 85 from 127th place last year. Mauritius was the second-best performer, moving into the top 20 from No. 34 last year. Trade liberalization and improved fiscal policies, including a flat tax, made Mongolia the third-best performer, and put it in the category of « moderately free » economies. Three essays in the 2008 Index help illustrate why economic liberty matters to human progress. In « Economic Fluidity: A Crucial Dimension of Economic Freedom, » Carl Schramm, president of the Kaufmann Foundation, explains that growth-driving innovation results not only from sound macroeconomic policy, but also from dynamism at the micro level. Most important is the interaction between « institutional, organizational and individual elements of an economy, » which gives rise to « the entrepreneurial energy and the speed of economic evolution. » Such « fluidity, » he writes, « facilitates the exchange and networking of knowledge across boundaries. This fosters both innovation and its propagation through entrepreneurship. » Mr. Schramm’s essay illuminates why successful economies cannot be centrally planned. Fluidity, he writes, resembles « the idea of the ‘the edge of chaos,’ the estuary region where rigid order and random chaos meet and generate high levels of adaptation, complexity and creativity. » It is « ideas on the margins, challenging the status quo, that lift the trajectory of an economy’s performance. » Try that in Cuba. In « Narrowing the Economic Gap in the 21st Century, » Stephen Parente, associate professor of economics at the University of Illinois at Urbana-Champaign, debunks several World Bank myths by showing that it is not the resources — land, workforce and capital — of an economy that play the most important role in explaining higher income countries. Instead it is « the efficiency at which a society uses its resources to produce goods and services. » Mr. Parente cites the microeconomic research of McKinsey Global Institute, which estimates that modern industry in India could take a huge bite out of its productivity gap with U.S. competitors by simply upgrading production techniques. India doesn’t need another multilateral education project. It needs to tap into knowledge already available in successful economies — the information and technology is out there. The trouble is that it is unavailable in many countries like India, because government barriers and constraints to limit competition make access difficult or impossible. French journalist Guy Sorman’s « Globalization is Making the World a Better Place » is a treatise on « one of the most powerful and positive forces ever to have arisen in the history of mankind. » It fosters economic development, moves countries from tyranny to democracy, sends information and knowledge to the most remote corners of the globe, reinforces the rule of law, and enriches culture. International commerce in post-World War II Europe, he reminds us, wasn’t invented by diplomats, but by entrepreneurs who wanted to end centuries of strife on their continent and build a peaceful union based on commerce. Today’s entrepreneurs, across the globe, have similar aspirations and abilities. If only the politicians would let them be free. Ms. O’Grady is a member of the Journal’s editorial board. She is co-editor, with Edwin J. Feulner and Kim R. Holmes, of the 2008 Index of Economic Freedom (410 pages, $24.95), available at 1-800-975-8625.

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Globalization is making the world a better place

Guy Sorman

What we call “globalization,” one of the most powerful and positive forces ever to have arisen in the history of mankind, is redefining civilization as we know it. This is one of my hypotheses. To be more specific, I will try to describe what globalization is, its impact on world peace, and the freedom it brings from want, fear, and misery. Globalization has six major characteristics: economic development, democracy, cultural enrichment, political and cultural norms, information, and internationalization of the rule of law. Economic Development Usually, globalization is described in terms of intensified commercial and trade exchanges, but it is about more than just trade, stock exchanges, and currencies. It is about people. What is significant today is that through globalization many nations are converging toward enhanced welfare. This convergence is exemplified by the 800 million people who, in the past 30 years, have left poverty and misery behind. They have greater access to health care, schooling, and information. They have more choices, and their children will have even more choices. The absolutely remarkable part is that it happened not by accident but through a combination of good economic policy, technology, and management. Of course, not all nations are following this path, but since the fall of the Berlin Wall, more and more are coming closer. Only Africa’s nations have yet to join, but who would have hoped and predicted 30 years ago that China and India, with such rapidity and efficiency, would pull their people out of misery? There is no reason why Africa, when its turn comes, will not do the same. Convergence should be a source of hope for us all. Democracy In general, since 1989, the best system to improve the welfare of all people—not only economically, but also in terms of access to equality and freedom—appears to be democracy, the new international norm. As more and more countries turn democratic or converge toward democratic norms, respect for other cultures increases. Democracy has guaranteed welfare far better than any dictatorship ever could. Even enlightened despots cannot bring the kind of safety democracy is bringing. Sometimes a trade-off between economic allotment and democracy occurs. Sometimes the economy grows more slowly because of democracy. Let it be that way. Democracy brings values that are as important for the welfare of the human being as economy is. After all, as history shows, the chance of international war diminishes step by step any time a country moves from tyranny to democracy, as democracies do not war against one other. That more and more nations are turning democratic improves everyone’s way of life. Cultural Enrichment Critics of globalization frequently charge that it results in an “Americanization of culture” and concomitant loss of identity and local cultural values. I would propose a more optimistic view, and that is that globalization leads to never-ending exchange of ideas, especially through popular culture, since it affects the greatest number of people. Through popular culture, people from different backgrounds and nations discover one another, and their “otherness” suddenly disappears. For example, a popular Korean television sitcom now popular in Japan has shown its Japanese viewers that, like them, Koreans fall in love, feel despair, and harbor the same hopes and fears for themselves and for their children. This sitcom has transformed the image Japanese have of the Korean nation more profoundly than any number of diplomatic efforts and demonstrates that globalization can erode prejudices that have existed between neighboring countries for centuries. Furthermore, this process of better understanding allows us to keep our identity and add new identities. The Koreans absorb a bit of the American culture, a bit of the French, a bit of other European societies. Perhaps they have become a different sort of Korean, but they remain Korean nonetheless. It is quite the illusion to think you can lose your identity. And it goes both ways. When you look at the success of cultural exports out of Korea —this so-called new wave through music, television, movies, and art— Korea becomes part of the identity of other people. Now, as a Frenchman, I am a bit Korean myself. This is how globalization works. We do not lose our identity. We enter into the world that I call the world of multi-identity, and that is progress, not loss. Political and Cultural Norms One of the most significant transformations in terms of welfare for the people in the globalized world is the increased respect given to the rights of women and minorities. In many nations, to be a woman or to belong to a minority has not been easy. In the past 30 years, however, women and minorities everywhere have become better informed and have learned that the repression they suffered until very recently is not typical in a modern democracy. Let us consider India, where a strong caste system historically has subjugated women and untouchables. Thanks to the globalization of democratic norms, these minorities are better protected; through various affirmative action policies, they can access the better jobs that traditionally were forbidden to them. This transformation has positive consequences for them, of course, and also creates better outcomes for their children’s welfare and education. We are entering into a better world because of their improved status, thanks to the cultural and democratic exchanges generated by globalization. Information Through legacy media and, more and more, through the Internet and cellular phones, everyone today, even in authoritarian countries, is better informed. For one year, I lived in the poorest part of China, and I remember well how a farmer, in the most remote village, knew exactly what was happening not only in the next village, but also in Beijing and New York because of the Internet and his cellular phone. No government can stop information now. People know today that, as they say, “knowledge is power.” Now let us imagine if the genocide in Darfur had happened 20 or 30 years ago. The Darfur population would have been annihilated by the Sudanese government, and no one would have known. Today we all know about the genocide. The reason why the international community has been forced to intervene is because of the flood of information. Knowledge is proving to be the best protection for oppressed minorities and, thus, one of the most vital aspects of globalization. Internationalization of the Rule of Law Internationalization of rule of law, of course, has limitations. The institutions in charge of this emerging rule of law, whether the United Nations or the World Trade Organization, are criticized. They are not completely legitimate. They are certainly not perfectly democratic, but you cannot build a democratic organization with non-democratic governments. It becomes a trade-off. In spite of all the weaknesses of international organizations, the emergence of a real international rule of law replaces the pure barbarism that existed before, which had consisted of the most powerful against the weak. Even though globalization cannot suppress war, it is remarkably efficient at containing war. If you examine the kinds of wars we have today, compared to the history of mankind, the number of victims and number of nations involved are very few. We are all safer because of both this emerging rule of law and the flow of information provided by globalization. Invented by Entrepreneurs We also need to remember that globalization is not some historical accident but has been devised and built by those who wanted it. Diplomats did not invent it. Entrepreneurs did. Let us look at Europe. After World War II, the Europeans discovered that they had been their own worst enemies. For 1,000 years, we were fighting each other. Why? We do not remember very well. Every 30 years, we went to war. The French killed the Germans. The Germans killed the French. When you try to explain this history to your children, they cannot understand. Diplomats and politicians from the 18th century onward unsuccessfully made plans to avoid this kind of civil war within Europe. Then, in the 1940s, a businessman came along named Jean Monnet. His business was to sell cognac in the United States, and he was very good at it. The idea Jean Monnet had was that perhaps the unification process of Europe should not be started by diplomats. Maybe it should be started by business people. He proceeded to build the European Union on a foundation of commerce. He started with coal and steel in 1950, and it was through the liberation of that trade that he conceived the unification of Europe, which has played a crucial role in the globalization process. Monnet’s guiding principle was that commercial and financial ties would lead to political unification. The true basis of European solidarity has come through trade. Through this method, all of the benefits of globalization have been made possible, because free trade has been at the root level. An attack on free trade is an attack on both globalization and the welfare of the peoples of the world, so we must be very cautious when we discuss trade, as it is the essential key allowing the rest to happen. None of this is to imply that trade is easy. In the case of Europe, it was made easier because all of the governments were democratic. It is much more complicated to build free trade with non-democratic governments, but because globalization starts with the construction of this materialistic solidarity, ideals must come afterwards. Two Threats to Globalization Perhaps what I have presented so far is too optimistic a picture of globalization, but I believe we have good reason to be upbeat. However, there are two threats to globalization that may be taken too lightly today. Global epidemics. In terms of health care, we are more and more able to cope with the current illnesses of the world. Though Africa still poses a problem, through global efforts it will be possible in the years to come to reduce the major epidemics there: AIDS and malaria. But new epidemics are threatening the world. If we remember what happened in China some years ago with the SARS epidemic, which was very short, and then the avian flu threat in 2005, you understand that there are new threats somewhere out there and that the modern world is not really prepared. One of the consequences of globalization is that people travel more, which means that viruses travel more and adapt. Therefore, I think globalization should require the international community to develop ever more sophisticated systems to detect and cure the new epidemics that have been a negative consequence of globalization. Terrorism. Although wars these days are more limited, new forms of warfare have emerged, which we call terrorism. Terrorism today can seem like a distant menace somewhere between the United States and the Middle East. Because of the global progress of the rule of law, however, violent groups know that it is no longer possible to wage war in the traditional way; therefore, people driven by ideological passions are increasingly tempted by terrorist methods as a way of implementing their agenda. Those are the true negative aspects of globalization: epidemics and terrorism. Regretfully, we are too focused on the traditional problems like free trade. We are not focused enough on the future threats. I wish globalization were more popular, but it is our fault if it is not. Perhaps we should use different words. “Globalization” is ugly. We should find a better word, and we should try to explain to the media and students that we are entering into a new civilization of welfare, progress, and happiness, because if they do not understand the beauty of globalization, they will not stand up for it when it is threatened.

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