Economic Freedom and Wealth of the Nations

“International comparison shows that the level of economic freedom in the European Union varies considerably from country to country and that very few countries have an outstanding record in this respect. Complete implementation of the idea of a single market and a focus on competition would result in enormous benefits. But we are confronted with political realities – inclinations towards protectionism, harmonisation and redistribution – that militate against such an approach”. This was the outcome the speakers of our conference on “Economic Freedom and the Wealth of Nations” agreed on.

“South Korea’s economy has been substantially liberalized in the past two-and-a-half decades, the most recent wave of liberalization occurring after the financial crisis of 1997. The basic parameters of market economy are intact. But Government intervention in Korea is still greater than in most advanced economies”, Walter Klitz, the Resident Representative of the Friedrich Naumann Foundation stated in his welcoming remarks.

The threats to economic freedom are manifold and some are inbuilt into the system (eg, the tradition of excessive legislative activity; the way legislation is developed and imposed on member states, the existence of treaty-based objectives that undermine economic freedom). There are threats to political freedom as well inherent in a) the tendency to ignore the principle of subsidiarity and b) the emasculation of the sovereignty of national parliaments. Deficiencies in economic freedom both at a European and at national levels go a long way in explaining many of the current problems the EU faces, not least the sovereign debt crisis. In the long term the European Union can only survive if its members reaffirm, embrace and implement free market principles in their dealings with each other.