GB 540 Economics for Global Decision Makers
Dr.: Barbara-Leigh Tonelli
May 8, 2012
Relationship between Economic Freedom and Variations in Wealth
The 2012 Index of Economic Freedom, indicates that the least government interaction with the economy of the country, the more freedoms that are provided to the individuals in country provides the individuals the most opportunity for individual wealth and prosperity (Index of Economic Freedom, 2012). Based on the information provided by the 2012 Index of Economic Freedom, the least governmental interactions with the economy, the more freedoms provided to the country the more opportunities for wealth and prosperity. (Index of Economic Freedom, 2012)
The Index of Economic Freedom brings to light that the fact that Economic Freedom has direct implications to a counties wealth. Reviewing the countries on the list clearly indicates that if a government limits involvement in economic activities, it maximizes opportunities for individuals to reach their potential, as stated by (Daniels, 2008). Therefore too much government interference impedes mutually beneficial interactions and transactions that occur on a daily basis. These are the transactions that are needed to increase productivity and ultimately lead to growth as stated by (Daniels, 2008). Economic freedom is defined as the application of political freedom. It is where individuals are allowed to choose their thoughts and actions and they are free from coercion. However, in the Economic realm it means that economic freedom is the freedom to produce goods and services based on one’s own judgment, unrestrained as stated by (Daniels, 2008). The individual must be free to acquire and dispose of private property, enter into contractual relationships. In order to implement freedom society requires the identifications of and protection of all rights of an individual and government being a protector of those rights. As stated by () the proper function of government is to protect individuals and their property. Government is also in charge of the courts and laws as you will understand when looking at Canada’s rank number 6 on the list of countries below. Providing the courts of laws keeps their ranking high on the list. The courts of laws must objectively declare the rules of all social interaction among individuals, as stated by (Index of Economic Freedom, 2012). With this individuals are free to exercise that right that doesn’t violate other individual rights. The United States also provides a court of laws that meets this requirement. If the government doesn’t allow freedoms by imposing restrictions and barriers on what would normally be mutually beneficial transactions. This stifles the economy generated by freedoms. Economic freedom has been shown in numerous peer-reviewed studies to promote prosperity and other positive outcomes. It is a necessary condition for democratic development. It liberates people from dependence on government in a planned economy, and allows them to make their own economic and political choices. As stated by (Frazier Institute, n. d.) the least governmental interactions with the economy as a whole, the more freedoms provided to the country and the more opportunity. Hong Kong appears to be the best example of least government interactions in the economy and seems to be the freest in 2012. It’s very unfortunate, but the United States of America has the least in the top ten. It is no longer considered the freest. Historically the United States of America has been freer than almost all of its Rivals. It has been no secret that the source of America’s prosperity was its economy. Here lately the essence of what America is all about is being lost as stated by (Hinderaker, 2012). According to (Index of Economic Freedom, 2012) the United States ranking on the Economic Freedom America has slipped to tenth place. It currently falls behind Hong Kong, Singapore,...