Rooting for Enlightened Economies

“The man who isn't a socialist at 20 has no heart, and a man who is a socialist at 40 has no head.” - Aristide Briand, Nobel Peace Prize Winner, long term diplomat and peace activist.

A life long idealist, I was a socialist between the ages of 12 and 15 and a convert to the Market by the time I was 16. The dreamer that I am, I hope that each country in the world ultimately achieves what I would like to call the “Enlightened Economic” state.

While I relish the growth of market economies globally in recent times, I am not for any of the following economic models that seem to dominate the globe:

• “Unbridled Capitalism” as practised in countries such as the US where the “connected” and a few winners take it all, where economic gains are highly skewed in favour of winners and losers are stuck in grinding misery;
• The most common form of economic model – Crony Capitalism – be it in Russia or most parts of Africa, Asia and Latin America;
• “Chaotic Capitalism” like in China where anything goes and there is no focus on social costs (individual rights, nature protection etc) of economic growth;
• “Rich Socialism” of Western Europe with their extremely high cost of social nets and rigidities that stymie business

What I root for is an ideal economic model which I describe as an “Enlightened Economy”, the 7 pillars of which are:

• Market is the mechanism that is used to deliver economic prosperity to the MAXIMUM number of the population.
• The INDEPENDENCE of the market is vigorously protected from the elected representatives of the Government, lobbyists, the elite and pressure groups such as unions using the powers of an independent judicial system and a free executive wing of the Government.
• Strong independent REGULATORY agencies ensure that a fair and just charge is levied for infrastructure services (telecom, electricity, roads, airports, ports etc) and the most essential commodities – “fair” being prices that are competitive with that charged globally for the same set of services and essential commodities; “just” being prices that allow maximum percentage of the population to avail of these services.
• Government has NO ownership of economic assets of the country but ACTIVELY manages or VIGOROUSLY directs the creation and maintenance of the social infrastructure - health, education and security – to ensure that the benefits accrue to the largest percentage of the population.
• Government CONTINUOUSLY wages a war against poverty to ensure that the less fortunate have the capabilities, skills and if necessary a piece of collateral that they can take to the market and thus be effective participants in the economy.
• The economy is an active member of international trade and actively ensures that artificial protective barriers to free trade of goods and services are ELIMINATED across the world and within its borders.
• Has a PROGRESSIVELY INCREASING tax system that supports all the economic “pillars” listed above; the rate of these taxes are continuously benchmarked against economies with similar structures to ensure that taxes don’t curb entrepreneurs or lead to flight of talent to other economies.

I believe that the UK, Australia, Canada, Singapore, Japan etc. have achieved significant levels of progress towards achieving this “Enlightened Economy” though a lot more always can be done.