The uncertain path from political to economic freedom

Becker makes an excellent point

The Becker-Posner blog has commenced a discussion on the linkage between political and economic freedoms.

The path from political to economic freedom, by contrast, is slower and more uncertain. It took India over four decades to begin to loosen its extensive controls over private companies, labor markets, start-ups, imports from abroad, and numerous other activities. It still has a long way to go. Mexico has had a free press and considerable political freedom for a century or so, but economic freedoms did not begin to evolve until the latter part of the 1980’s. Israel has fierce competition among political parties, but continues to have an overly controlled economy…

This analysis implies, in particular, that if China continues to grow rapidly, the Chinese people will become increasingly dissatisfied with censorship and their limited political freedom. Already they have much greater freedom than under Mao to voice different opinions, and to criticize the government -if not done too stridently and openly. These forces will gather steam, and I believe they will lead before long to a much more open political process.

To be absolutely clear, I am not claiming that people value economic freedoms more than political freedoms. Rather, the argument is that economic freedoms tend to lead before long to political freedoms, while the reverse causation is slower and less certain. Put differently, private property and open markets help economies grow, which gives the political process a strong shove toward democracy. For this reason, the President’s inaugural speech should have paid more attention to economic freedoms, along with his stirring and convincing case for democracy.[Becker-Posner blog]

Becker is quite right in calling for the United States to champion economic freedom across the world, but that really should apply to democratic countries like India. Democracies though, are as resistant to foreign calls for economic freedom as dictatorships are to foreign calls for democracy.

On the other hand, it is important to remember that while there have been plenty of authoritarian regimes in the twentieth-century, there has only been one China. It is enlightened leadership, not merely authoritarianism, that provides economic freedom to its people. Now, enlightened leadership is not easy to find, and given the odds, a democratic country albeit with imperfect economic freedoms may well be the safer option.

And don’t miss Posner’s response to Becker’s post.

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