30 March 2007

free ride on economic coattails

who'da knowed? seems iceland is balls-out beating the pants off much of the world in economic growth with unemployment below 2%. having instituted a flat tax scheme, chopped corporate rates from 45% to 18%, and implementing tax competition internally, their revenues tripled and tripled again. they've also granted private property rights to fisheries, one of their major industries. all of this market liberalization has made the icelandic economy a major powerhouse.
Why did Iceland turn this way? The international trend toward economic liberalization played a role. Free-market economists like Friedrich von Hayek, Milton Friedman and James M. Buchanan all visited the country in the 1980s, influencing not only Mr. Oddsson but many of his generation. In the battle of ideas here, the right won. There was also a common recognition that the old methods did not work. Inflation was proving too disruptive, government companies too inefficient, the subsidies too costly. Ideas conspired with circumstances to bring about successful economic reforms.
so we needn't think we're going out on a limb to dream of liberalizing our own markets. we have yet more proof that it can be done and that Keynes was a tool. or we can just sit by and watch india and china eat our breakfast.

think of the children.

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