The chapters introduced a very powerful notion that economic
freedom may result in economic growth. However, the political freedoms linked with
economic growth, in my opinion, can be easily neglected or overlooked. Countries
concerned with economic growth benefit from market liberalization, but those countries
such as Germany, as a textual example, also benefit from political freedoms. It
seemed that the economic growth rooted in greater political freedoms can be
falsely attributed to greater economic freedom because political and economic
freedoms are mutually reinforcing, since institutional reform in favor of
greater freedoms reaps the greatest economic benefit since greater democracy
results in faster economic growth and greater level of economic freedom.
Why is political freedom relevant? It means that a countries
with lower levels of democracy tend to perform worse than those with higher
levels of democracy, and since economic and political freedoms are mutually
reinforcing many economic benefits from greater levels of democracy may be
overlooked very easily. Thus, why is it important to separate economic benefits
that happen as a result of political freedoms from those that occur from
economic freedoms? It would allow a country to find if political repression or
lower political freedoms lower its prosperity even with much economic freedom,
and this is a very important notion.
The problem with assessing political and economic freedom is
that it cannot be gauged with absolute accuracy. There are various institutions
that attempt to measure levels of economic and political freedom in various
economies, but the measurements can often be somewhat subjective even when
aiming for objectivity. Why would I say this? Because bias in these assessments
in inherent since everything is relative, as my first post on this blog stated
and judgment becomes crucial in these matters. As a result, it would be helpful
to know an exact level of economic growth that occurred from institutional
reform in Postwar Germany with separate components resulting from greater
economic and political freedoms, but this is simply impossible and the best substitution
is an approximation. Finally, I believe the text may have somewhat neglected
the component of greater political freedoms causing faster economic growth and
greater level of economic freedom.
No comments:
Post a Comment