The Meaning Behind Economic Freedom

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March J, a researcher at Texas Tech University suggests that countries that enjoy a large demand for natural resources by other countries have less development because of corruption and thus policies which are lenient to corruption are often adopted. The researcher submits that “These easy riches may prolong policies and practices of states which are detrimental to economic freedom…” Some might argue that the confusion and ultimately the obstruction to the attainment of economic freedom lie in the meaning and approaches of the concept itself. There are different perspectives on the processes and practices that guide and determine economic freedom particularly in developing nations.

Some studies on economic freedom include empirical evidence that shows that economic freedom leads to a number of improved societal outcomes including economic growth, higher incomes, happiness and ultimately improved living standards. Some claim that the fundamentals of socialism which push for state ownership and control of strategic sectors of the economy are the foundation for sustainable economic transformation in any society that hopes to be self-reliant and include the previously marginalised into the economic circle of the nation.  The Economic Freedom fighters is one of the socialists organisations in the world that claim in order for unemployment, poverty and inequality to be adequately addressed and to attain economic freedom it is imperative for the state to control sectors such as “banks, energy production, and telecommunications and retain the ownership of central transport and logistics”

According to Neo-classical trade theory, an economic and political perspective based on fundamental empirical reflections, “countries that remain highly protected for long periods appear to suffer significantly.” In support of this theory Heckeloman, an economist, believes that competitive markets in the context of globalisation foster economic growth and ultimately lead to economic freedom. The Theory of Welfare Economics of International Trade argues that “there are gains to be obtained from opening one’s economy.” The theory supports the idea that “the greater economic freedom that comes with increased global trade and lifting of barriers will lead to an increase in the welfare of people.” The ideas here led to the concept of economic growth as fundamental and imperative to the achievement of economic freedom by means of capitalist ideologies. However Paul Streeten, an economist, suggest that economic growth is not enough “For the quality of life and cannot indicate that basic needs are met.” This is because:

a) the income or economic growth approach to measuring human progress deals only with the quantity of products but not with the appropriateness of those goods and services. b) Some basic needs can only be satisfied, or more effectively satisfied through public services (education, water, and sanitation), through subsidized goods and services, or through transfer payments. c) Consumers, both poor and rich are not always efficient in optimizing nutrition and health. Additional income can be spent on foods with lower nutritional value leading to a decrease in health.

  1. d) The manner in which additional income is earned may affect the quality of life adversely. Compared to others, certain production choices can increase income more but have a greater negative impact on human and environmental well- being. One example of this is female employment. Although the mother’s income can rise, breastfeeding may reduce, which decreases the nutrition of babies. e) Increased income does not guarantee a reduction in the mal-distribution of wealth within society or households. f) The economic growth approach neglects the importance of non-material needs.”

 

The United Nations Development Program in its 1999 report argues that capitalist means of achieving economic freedom may very well be necessary for economic growth but cannot promote equity which is an important factor in the full realisation of economic freedom according to the organisation.

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I am a lover of current affairs and everything media, Strategic Corporate Communication student. I write to spark conversations, influence perspectives and inform.

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