Kapitalisme Index 2005 (USA slechts op #13)

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Hail Estonia!

By MARY ANASTASIA O'GRADY
WSJ - January 4, 2005; Page A12

For the first time in the 11 years that the Heritage Foundation and The Wall Street Journal have been publishing the Index of Economic Freedom, the U.S. has dropped out of the top 10 freest economies in the world.

In 1998, the U.S. was the fifth freest economy in the world, in 2001 it was sixth, and today it sits at 12th, tied with Switzerland. The U.S. drop in ranking is explained in part by a slightly lower score, but mostly by the good performance among its competitors. The lesson? Stand still on the highway to economic liberty and the world will soon start to pass you by.

The 2005 Index, released today, ranks Hong Kong once again as the world's freest economy, followed by Singapore and Luxembourg. But it is Estonia at No. 4 that makes the point. This former Soviet satellite is a model reformer, setting the standard for how fast countries can move ahead in the realm of economic liberalization. Ireland, New Zealand, the U.K., Denmark, Iceland, Australia and Chile, all relatively recent converts to free markets, also outpace the U.S. this year.

The Index scores economic freedom in 10 categories, ranging from fiscal burdens and government regulation to monetary and trade policy. The U.S., with its strong property rights, low inflation and competitive banking and finance laws, scores well in most. But worrying developments like Sarbanes-Oxley in the category of regulation and aggressive use of antidumping law in trade policy have kept it from keeping pace with the best performers in economic freedom.

Most alarming is the U.S.'s fiscal burden, which imposes high marginal tax rates for individuals and very high marginal corporate tax rates. In terms of corporate taxation as an element of economic freedom, the U.S. ranks a lowly 112th out of the 155 countries scored, and its top individual tax rate ranks only slightly better at 82nd. U.S. government expenditures as a share of GDP increased less in 2003 than in 2002, but the rise since 2001 is what explains the U.S.'s decline in score over the period.

In addition to the 155 economies scored, six, including Iraq, had to be sidelined for lack of reliable data. The 2005 Index finds that, on balance, freedom has again made strides around the globe: 86 countries are more free this year, 57 are worse off, and 12 remain unchanged. Europe and North America are by far the freest regions, with even their median scorers, Spain and the Czech Republic, in the top 33. Notable gains were made by China; it is still a "mostly unfree" economy but moved up 16 places and is continuing a trend toward liberalization.

Policy makers who pay lip service to fighting poverty would do well to grasp the link between economic freedom and prosperity. This year the Index finds that the freest economies have a per-capita income of $29,219, more than twice that of the "mostly free" at $12,839, and more than four times that of the "mostly unfree." Put simply, misery has a cure and its name is economic freedom.

Ms. O'Grady edits the Journal's "Americas" column. She is co-editor, with Marc A. Miles and Edwin J. Feulner Jr., of the 2005 Index of Economic Freedom (414 p., $24.95), which can be ordered at 1-800-975-8625.

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HK Again Named Freest Economy, Though Worries On Rise

DOW JONES NEWSWIRES
January 4, 2005 3:00 a.m.

HONG KONG -- The Heritage Foundation, a U.S. think tank, has again ranked Hong Kong as the world's freest economy, but free-market advocates say the Chinese territory could be in danger of slipping from its perch.

Hong Kong retained its No. 1 spot in the foundation's Index of Economic Freedom for the 11th consecutive year, followed by Singapore, another Asian port city, at No. 2, and Luxembourg in third place. Estonia, a former client state of the Soviet Union, ranked a surprising fourth, highlighting the rapid progress in its economic reforms.

Hong Kong owes its top ranking to its status as a free port, with few duties and virtually no restrictions on trade or investment, together with a low-tax and small-government tradition bequeathed by its former British colonial rulers. But as other economies liberalize, those qualities are no longer quite as distinctive as they once were.

"A lot of other countries are making the right moves in the right direction," said Edwin J. Feulner, president of the Heritage Foundation, in an interview. "Hong Kong can never take its standing as number one for granted."

Feulner said he doesn't like the prospect of new taxes in Hong Kong, where the government's top economic policy official, Financial Secretary Henry Tang, has repeatedly said he favors introducing a sales tax. "That would be the first thing I would caution Hong Kong on: look very hard before you start enacting any new taxes," Feulner said.

He also said he disapproved of the government's tendency in recent years to propose expensive real estate projects as ways of boosting Hong Kong's international standing in technology and the arts. Feulner named the ill-fated Cyberport development from the Internet bubble era, which never lived up to its promise to be a local Silicon Valley, and the proposed HK$24 billion West Kowloon Cultural District, now under heated debate, as poor uses of capital.

While the Heritage Foundation focused on advising Hong Kong not to pursue policies that might endanger its standing, a local group said there is still lots the territory's government could do to liberalize the economy.

"Have we done well in certain areas? Sure, we have low taxes, but there are huge areas where the government is involved in the economy," said Andrew Work of the Lion Rock Institute, a Hong Kong-based think tank that advocates free-market policies.

He pointed to government-granted monopolies in areas like public utilities, gambling and the regulation of professional services. The Heritage Foundation's index helps capture how easy it is to start up a company in different places, Work said, but doesn't always capture specific local regulations that can prevent competition.

"Regulation is something that flies under the radar of a lot of people. They don't see a tendency toward more regulation until it affects them personally," he said. "The index puts pressure on the government to perform in certain areas, but it's up to the Hong Kong people to pressure the government on other areas."

In a statement responding to the Heritage Foundation's announcement Tuesday, Hong Kong Financial Secretary Henry Tang said the government is committed to both preserving its strengths and making changes where there is room for improvement. He didn't specify what those areas might be.

-By Andrew Batson, Dow Jones Newswires; 852-2802-7002; andrew.batson@dowjones.com

Edited by David Riordan

The Index of Economic Freedom is published jointly by the Heritage Foundation and The Wall Street Journal, owned by Dow Jones & Co. (DJ). In addition to The Wall Street Journal and its international and interactive editions, Dow Jones publishes this and other newswires, as well as Barron's and other magazines. It co-owns CNBC financial television operations in Asia and Europe, and provides news content to CNBC in the U.S.

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The Netherlands became a driving force in global trade and banking during the 17th and 18th centuries and, despite developing a large, European-style safety net over the years, maintains its openness to the rest of the world. Rotterdam remains the world’s largest port as measured by tonnage of goods, and there are few restrictions on foreign direct investment. Over the past two decades, the Netherlands has been the most successful of the core European Union countries, growing at an average annual rate of 3 percent from 1982 to 2002. More recently, however, GDP grew only minimally in 2002 and contracted by 0.5 percent during 2003. Unemployment hovers around 7 percent, up from 3 percent in 2001. Since 1997, Dutch labor costs have increased faster than those of European competitors. Rapidly declining competitiveness, the result of wage increases and an overly generous pension system as well as a decline in the number of workers, has brought the Dutch to an economic crossroads. Following the close January 2003 parliamentary election, outgoing Prime Minister Jan Peter Balkenende was narrowly returned to power, ruling in coalition with the conservative People’s Party for Freedom and Democracy (VVD) and the centrist D66 party. The Netherlands’ fiscal burden of government score is 0.1 point worse this year, but its monetary policy score is 1 point better. As a result, its overall score is 0.09 point better this year, causing the Netherlands to be classified as a “free” economy.

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Op woensdag 5 januari 2005 22:06 schreef Tup het volgende:
Is er ook een grafiekje met "grootte van overheid" en "per capita income", of heeft heritage dat maar niet onderzocht omdat dan blijkt dat daar misschien ook wel een verband tussen zit?

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Op woensdag 5 januari 2005 22:06 schreef Tup het volgende:
Is er ook een grafiekje met "grootte van overheid" en "per capita income", of heeft heritage dat maar niet onderzocht omdat dan blijkt dat daar misschien ook wel een verband tussen zit?

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Op woensdag 5 januari 2005 22:06 schreef Tup het volgende:
Is er ook een grafiekje met "grootte van overheid" en "per capita income", of heeft heritage dat maar niet onderzocht omdat dan blijkt dat daar misschien ook wel een verband tussen zit?

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Op woensdag 5 januari 2005 22:24 schreef NightH4wk het volgende:
Dat komt er onder andere in voor, maar 'grootte van de overheid' is een veel te vaag begrip dus hebben ze het omgezet in betere dingen. Ga het lezen dan.

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Op donderdag 6 januari 2005 12:08 schreef accelerator het volgende:
Een dictatuur is eigenlijk een synoniem voor gebrek aan economische vrijheid.