New Zealand has a market system that is defined by features such as limited regulations, free trade, and the rule of law. The combination of these as well as New Zealand’s political stability and its ability to cooperate with international trade partners has led to a strong, growing economy. Confidence in the government’s ability to protect property and equally apply laws has led to entrepreneurs opening a variety of businesses in the country and freely cooperating with each other in trade that addresses the issue of scarcity. New Zealand is also a part of multiple trade agreements with a variety of countries. These treaties minimize or even outright ban the charging of tariffs on imported goods from partner nations.
More information: https://www.cia.gov/the-world-factbook/countries/new-zealand/
The United States
The United States features a market economy that is built on property rights, the rule of law, and limited regulations. The country has a long history of attracting entrepreneurs who are looking to find financial success in a nation with a limited, but stable government. People know that the government works to prevent theft and violence and therefore peacefully cooperate via trade to address the issue of scarcity. The United States has multiple free trade agreements with a variety of countries. These treaties encourage private investing and limit tariffs. However, in recent years there has been a growing call for increasing tariffs in order to protect American industry from foreign competition. Additionally, some have argued that the country’s regulations have become overwhelmingly complex for entrepreneurs to navigate.
More information: https://www.cia.gov/the-world-factbook/countries/united-states/
Greece has a market economy system that is characterized by free trade, a significant government debt, and the rule of law that is inconsistently enforced. The country’s economy has grown in strength in the past decade, as investors have grown somewhat more confident in the stability of the country’s government and financial system. Greece has entered into a variety of free trade agreements with multiple nations to improve the import and export of goods. However, there is still widespread corruption within the governing system.
More information: https://www.cia.gov/the-world-factbook/countries/greece/
India is the world’s most populated stable democracy. Its system features weak property rights, higher than average amounts of corruption, and a financial system that is heavily dominated by state-owned institutions. India has seen some economic liberalizations in recent years but corruption within the government means that a weak rule of law continues to exist. The lack of confidence in the stability of the government reduces people’s trust in their system and makes them more wary of cooperating through free trade. Foreign investors face difficulty in becoming involved in India’s financial systems due to large government barriers.
More information: https://www.cia.gov/the-world-factbook/countries/india/
Venezuela has a command system in which the government is very involved in economic matters. The country is run by an authoritarian dictatorship whose control over the judiciary has led to the disappearance of the rule of law. The government’s large amounts of power has severely diminished property rights as well. The unequal treatment of different citizens under the law does not incentivize people to cooperate with each other. Many of the country’s industries are state-owned and prevent citizens or foreigners from investing. The state-run financial system determines who receives money, and therefore often doles out funds in corrupt ways.
More information: https://www.cia.gov/the-world-factbook/countries/venezuela/
Cuba has been under the control of the Communist Party since 1959. The party has complete control over political power in the country, including the ability to appoint and remove judges at any time. Its economy is a command system in which the majority of workers are employed by state-run sectors. Private businesses are heavily regulated to the point of repression. The lack of property rights does not incentivize people to cooperate with each other through trade. Additionally, the government has control over the financial system and decides which foreign investments are accepted. It also maintains control over which citizens receive credit, making it difficult for entrepreneurs to start businesses.
More information: https://www.cia.gov/the-world-factbook/countries/cuba/
- Identify principles upon which free societies are based. Explain the importance of each principle to a free society.
- Using the countries you just read about and the principles needed for a free society, create a “Free Society Continuum” illustrating where these countries fall. How do these principles of freedom contribute to prosperity?
- How do these principles of freedom contribute to prosperity?
- Who benefits from freedoms being restrained? Why?
- Who is harmed from freedoms being restrained? Why?