ECONOMIC FREEDOM INDEX 2010

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The Montreal Review, April, 2010

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According to the Economic Freedom Index 2010 prepared by Heritage Foundation and Wall Street Journal Hong Kong keeps the first place of the ranking for free economy followed by Singapore, Australia, and New Zealand. In top ten, there are four countries from the region of Asia, three from Europe (Ireland, Switzerland, and Denmark), two North American states (Canada, United States) and one South American country - Chile. Two big states, Canada and the United States, make North America the biggest region of economic freedom. At the bottom of the ranking are countries from South America and Africa such as North Korea, Zimbabwe, and Cuba.

The first in the rank, Hong Kong, is a self-governing city-state, part of China. Its relative independence has been proved again in March 2010, when Google moved its Chinese web search service to Hong Kong in order to escape Chinese censorship.

Starting business in Hong Kong takes six days, compared to the world average of 35 days. Hong Kong's effective tax rates are among the lowest in the world. Individuals are taxed either progressively, between 2 percent and 17 percent on income. The top corporate income tax rate is 16.5 percent.

Corruption is perceived as minimal, says the report. Hong Kong ranks 12th out of 179 countries in Transparency International's Corruption Perceptions Index for 2008. Giving or accepting a bribe is a criminal act. Huang Guangyu, the founder of Gome Electrical Appliances Holdings Ltd. and one of the richest men in China (when he was of age 37 his fortune worth $6.5 billion) is facing today charges of bribery, share price fixing and possibly money laundering.

Labor and work hours regulations in Hong Kong are flexible. In 2008 labour unions asked the government to introduce labour laws setting the maximum working hours at 44 hours per week with paid overtime for working more. According to Lee Cheuk Yan, general secretary of the Confederation of Trade Unions, about 40 per cent of employees in Hong Kong work more than 48 hours a week while 300,000 workers put in 60 hours.

Ireland is the first European country in the list; its economy is the 5th freest in the 2010 Index. Like Hong Kong Ireland was for long time under British governance. It is independent state since 1921. Ireland has suffered severe economic and financial challenges because of the 2009 financial and banking crisis. The country's two largest banks, Bank of Ireland and Allied Irish Bank, have received capital injections, and the government has taken a 25 percent stake in the Bank of Ireland. The International Monetary Fund has predicted economic growth of 1.9% in the Irish economy in 2011. Ireland is now running a budget gap worth 14.3% of its economic output (according to Eurostat) - more than four times the EU's limit and almost three points higher than predicted.

Chile's economy is the 10th freest according to the 2010 Index and first in Latin America. The country had high inflation, averaging 7.2 percent between 2006 and 2008. Chile's financial system is among the region's and the world's most stable and developed. Private property is well protected. Contracts are secure, and courts are transparent and efficient. Chile's central bank cut its growth forecast for 2010 and raised its inflation outlook after the earthquake that struck the country in February. The economy may grow 4.25 percent to 5.25 percent this year.

The country at the bottom of the ranking for economic freedom is North Korea. The state regulates the economy through central planning. North Korea stopped publishing economic statistics as long ago as the 1960s, when its rapid early growth began to slow. Almost all property, including nearly all real property, belongs to the state, and the judiciary is not independent. The country is extremely poor, in the 1990s more than 1 million people died of famine. Thirty-seven percent of children in North Korea have stunted grown due to malnutrition and 23 percent are underweight. There are about 200,000 North Koreans imprisoned in political concentration camps. In 15 April the North Korean dictator Kim Jong Il marked the "Day of the Sun" - the anniversary of his father's birth 98 years ago - with fireworks and a laser display lit up the skies above the Taedong River. "The evening of fireworks will demonstrate before the world the inexhaustible mental power and indomitable spirit" of North Korea as it pushes ahead its mission to build a "great, prosperous and powerful nation" by 2012, Korean Central News Agency said on celebrations.

How can we benefit from the promise of government while avoiding the threat it poses to individual freedom? In this classic book, Milton Friedman provides the definitive statement of his immensely influential economic philosophy-one in which competitive capitalism serves as both a device for achieving economic freedom and a necessary condition for political freedom. The result is an accessible text that has sold well over half a million copies in English, has been translated into eighteen languages, and shows every sign of becoming more and more influential as time goes on. Selected by the Times Literary Supplement as one of the "hundred most influential books since the war"

In The Victory of Reason, Rodney Stark advances a revolutionary, controversial, and long overdue idea: that Christianity and its related institutions are, in fact, directly responsible for the most significant intellectual, political, scientific, and economic breakthroughs of the past millennium. In Stark's view, what has propelled the West is not the tension between secular and nonsecular society, nor the pitting of science and the humanities against religious belief. Christian theology, Stark asserts, is the very font of reason: While the world's other great belief systems emphasized mystery, obedience, or introspection, Christianity alone embraced logic and reason as the path toward enlightenment, freedom, and progress. That is what made all the difference. In explaining the West's dominance, Stark convincingly debunks long-accepted "truths." For instance, by contending that capitalism thrived centuries before there was a Protestant work ethic-or even Protestants-he counters the notion that the Protestant work ethic was responsible for kicking capitalism into overdrive. In the fifth century, Stark notes, Saint Augustine celebrated theological and material progress and the institution of "exuberant invention." By contrast, long before Augustine, Aristotle had condemned commercial trade as "inconsistent with human virtue"-which helps further underscore that Augustine's times were not the Dark Ages but the incubator for the West's future glories.

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