FREEDOM AND ECONOMIC PERFORMANCE Chapter 10 Lecture 4 An important political role is to balance social goods with individual interests.

This is a Historical Challenge Highlighted by Two Different Political Systems “Under capitalism, man exploits man. Under socialism, the reverse is true”— Polish proverb “The fear of capitalism has compelled socialism to widen freedom, and the fear of socialism has compelled capitalism to increase equality.”—Will and Ariel Durant The challenge in China is one of balancing free markets with socialist political systems

Relationship Between Political and Economic Freedom According to your text, political and economic freedom are interdependent. 27 free economies in the world account for 17% of the world’s population, but 81% of the world’s output!

Relationship Between Political and Economic Freedom According to Freedom House, 2/3 of the world’s people live in economies which are not free. Impediments to economic freedom are not necessarily repressive government –Government can’t establish rules for the economy and see that they are obeyed

Relationship Between Political and Economic Freedom An important part of that is the inability to suppress fraud and corruption –Use of family connections –Organized criminal activities –Religious persecution –Lack of effective legal system

Relationship Between Political and Economic Freedom Not everyone agrees Some Asian governments (particularly Singapore) argue that “freedom” can be overdone. The needs of the many must come before the need for total individualism. What do you think?

Relationship Between Political and Economic Freedom According to Freedom House, 2/3 of the world’s people live in economies which are not free Impediments to economic freedom are not necessarily repressive government –Sometimes the government can’t establish rules for the economy and see that they are obeyed

Relationship Between Political and Economic Freedom Impediments to economic freedom also are: –Inability to suppress fraud and corruption –Use of family connections –Organized criminal activities –Religious persecution –Lack of an effective legal system

Relationship Between Political and Economic Freedom According to your text, political and economic freedom are interdependent and they affect outcomes: –27 free economies in the world account for 17% of the world’s population, but 81% of the world’s output!

Relationship Between Political and Economic Freedom Not everyone agrees Some Asian governments (particularly Singapore) argue that “freedom” can be overdone. The needs of the many must come before the need for total individualism What do you think?