04/18/2017

A Tale Of Two Nations And Economic Freedom

John O. McGinnis, Library of Law and Liberty

The New York Times ran two stories within two days about two very different nations.  One story noted that France was an unhappy place in danger of electing an extremist, Marie Le Pen, as President.  But the author found the plight of the country puzzling, noting that France has wonderful infrastructure compared to the United States and continued to have a culture second to none. He puts its misery down to the French fixation on the losses of past glories.

Another story focuses on the very different mood in New Zealand. People are happy there and many foreigners want to immigrate. The prime reasons given are its isolation from the rest of the troubled world and its social tolerance, as demonstrated by its legalization of same-sex marriage and acceptance of refugees. The photo accompanying the story shows Sikh men in colorful turbans against some pleasant New Zealand scenery.

The two stories show the weaknesses of the analytic powers of our elite media and its indifference to economic freedom.  The best explanation of France’s stagnant misery and New Zealand dynamic happiness can be found in the The Heritage Foundation’s Index of Economic Freedom. New Zealand ranks No. 3 and France No. 72 of the 160 nations surveyed in the economic liberty they permits citizens.  Given that most nations ranked below France are developing nations, New Zealand and France inhabit pretty different economic universes among developed nations.

It is true that in passing the author of the article about France, Roger Cohen, mentions “its sometimes rigid welfare state” as a cause of grumbling. Nevertheless, he actually dismisses its structural 10 percent unemployment rate and non-existent growth as substantial causes of its plight.

But economic freedom is the most parsimonious explanation of the radically different social and political situations in which these nations find themselves.  France’s lack of economic freedom is directly related to the threat of extremism. Because France is such a highly regulated and government subsidized society, politics becomes a game of all against all where different sides want to defend and expand the regulations that favor them. It certainly makes more sense to focus on rent-seeking than on entrepreneurship in a nation that stacks the decks against entrepreneurs.

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