Angry at the Angry Bear

It annoys me when someone claims I made a mistake that I didn’t make, and then forces me to waste lots of time showing that I am right. 

Here is Angry Bear:

1. Without looking at the countries, its obvious to me, a non-ivory tower guy, that the data on Sweden on wrong. He shows Sweden’s GDP per capita as a % of US’ GDP per capita dropping from 1980 to 2008 from .868 to .794. Now, I don’t know offhand what the ratio really is, but it seems kind of funny, I waste two precious minutes pulling up the World Bank data to which he alludes and another finding the figures on the sheet. The numbers I get, going for the GDP per capita, constant 2000 US $ (obviously we want to adjust for inflation, right?) are .865 and .852. In other words, about the same. Sweden no longer works for his argument. I’m not going to look for the data on the rest of the countries.

Um, no you don’t want to adjust for inflation when comparing two countries at the same point in time, you want to adjust for PPP.  Time for Angry Bear to go back to the Ivory Tower.  I used lines 124064 for Sweden and line 124083 for the US.  GDP per capita in PPP terms.  What would be the point of using constant dollars?  The actual amounts in 1980 are $10578 for Sweden and $12186 for the US.  In 2008 the incomes are $36,961 in Sweden and $46,350 in the US.

2. The next question I have is why, when the World Bank has so many countries listed, he picked 13. Why 13? Why those 13? He doesn’t say, and its not exactly a choice that makes any sense. There are some rich European countries, some rich Asian countries, and then there’s Argentina. There’s a conspicuous absence of countries that not long ago folks on the right were calling raving successes and which would probably work according to Sumner’s ratio. I’m guessing Portugal, Hungary, Ireland, Spain, Russia and Latvia, off the top of my head, would fit the bill. But we all know they wouldn’t pass the giggle test these days.

I didn’t have time to take all 200 countries, so I did what I thought would be interesting examples.  If you compare the US and UK to all of Western Europe, you’ll get roughly the same result.  I am afraid that I don’t understand his “giggle” about the countries listed.  Ireland went from .509 of US levels in 1980 to .903 in 2008, the last data in the World Bank table.  I am certain Ireland will slip back somewhat in the current recession, but nowhere near to 1980 levels.  Spain has had some neoliberal reforms, but is not a particularly neoliberal economy in most surveys.  Portugal has done even less.  And yet both have gained on the US, probably mostly because they started at lower levels.  (I’ve never seen anyone cite Portugal as a model, though I don’t doubt someone has.)   But what is the mention of those countries supposed to show?  He seems to imply they are big neoliberal examples that have done poorly, whereas they are not very neoliberal countries that have gained on the US (and Italy, France, etc.)  I suppose his two errors cancel out and make him right in a weird way.  The Soviet Union went into a deep depression in the late 1980s and early 1990s, before any market reforms were implemented.  The Soviet bloc countries that reformed quickly (Poland, Czech Republic, Estonia, etc, did much better than those that reformed more slowly.  Of course comparisons are difficult because these countries differ in all sorts of respects.  Another interesting comparison is Russia/Ukraine.  Russia reformed faster, and did better than the Ukraine.  Slovakia fell behind, and then picked up somewhat after reforming.  Isn’t all this widely known?   BTW, pointing to the current depression in Latvia as evidence that their model failed isn’t very wise.  One could have made the same claim about S. Korea in 1998, and look at Korea today.

3. I’d include Argentina among the conspicuous absences, except that Sumner has mentioned Argentina, but oddly, as an example that he thinks makes his point. See, his numbers show Argentina lost ground relative to the U.S., and he seems to believe Argentina is one of those countries that did nothing that Reagan or Thatcher would approve of. But that’s odd. Argentina was the success story for folks on the right in the early to mid-90s. (I know the Economist (or FT) covered Domingo Cavallo a number of times.) There’s no way to argue that the US went through anywhere close to the same level of privatization as Argentina did during the 1980 to 2008 period. Scratch Argentina from his argument.

A couple points here.  Argentina ran statist policies in the 1980s and 2000s.  There were reforms in the early 1990s, but free market policies don’t produce success when combined with contractionary monetary policy.  Indeed that’s essentially the whole point of my blog.  Argentina did very well for a while after it did some privatization, but of course their ultra-tight monetary policy put them into a depression at the end of the 1990s.  Then they switched back to statism.  I have no idea why a country with statist policies in the 1980s and 2000s and a deflationary monetary policy in the late 1990s, would be expected to do well.  Monetary policy is the Achilles Heel of free market economics.  It tripped up Argentina, America in 1929, and Latvia.  These are failures of the right, not failures of neoliberalism.

4. Another country on his list is Germany. Now, Sumner acknowledges the whole East German West German thing, but seems to feel that since they lost ground relative to the US since 1994, its a sign that they mostly increased regulation relative to the US. Ignore the fact that East Germany went from a prison state to a piece of West Germany and pretend they somehow became more regulated and all the events on the ground happened with the flip of a switch.

I am pretty sure that East Germany gained on the US and West Germany fell behind.  Exactly what I would have expected.  So what’s his point?  BTW, the West is far bigger than the East, so it dominates the combined data.

5. I’m not sure exactly how much the Singaporean economy liberalized. Wikipedia tells me the government controls companies that account for 60% of the economy. If that’s Margaret Thatcher’s paradise, I cannot imagine what isn’t.

OK. Time’s up. Gotta go. Have at it.

Last time I looked Singapore was ranked near the top of every single international survey of free market economies.  Many people are fooled by the fact that technically the Singapore government owns companies like Singapore Air.  But government ownership only matters if you have either barriers to entry of government subsidies.  The Singapore government does neither.  Singapore Air competes with other airlines, and is thus (de facto) a private company.  And of course Singapore has much lower tax rates than Thatcher’s Britain, and rather than an NHS, they have patients pay for health care out of HSAs.

So that’s all they’ve got?  I guess I am not angry at all.  The Angry Bear helped me make my case even more strongly.  The examples that he thinks refuted my case actually support it.

HT:  Marcus



30 Responses to “Angry at the Angry Bear”

  1. Gravatar of Mark A. Sadowski Mark A. Sadowski
    25. May 2010 at 07:55

    This weekend I pointlessly argued with an apparent adherent of Austrian economics who claimed that neoliberal policies were the solution to the European sovereign debt crisis. I specifically pointed to Ireland and the Baltic states as examples, not because I oppose such policies (I credit much of the good economic performance of those countries through 2007 to those policies), but because such policies failed to protect them from the terrible consequences of poor monetary/exchange rate policy.

    I suppose there are those on the left who could try to use these same countries as examples to prove that neoliberalism is a failure, but they would be making an equally grave mistake.

  2. Gravatar of Christopher Hylarides Christopher Hylarides
    25. May 2010 at 07:56

    With respect to Singapore, the government there takes a very hands off approach to their companies and in most cases they don’t own all of the shares. They allow the companies to raise capital almost at will and there’s almost no political interference in labour or business practices. In other words, they’re just a shareholder.

  3. Gravatar of ssumner ssumner
    25. May 2010 at 08:51

    Mark, That balanced view is exactly right. That’s why I am critical of the right just as often as I am critical of the left.

    Christopher, Thanks for that info, I had heard the same.
    Angry Bear picked up a few random facts here and there, but doesn’t seem to have much of an idea about the forces that have reshaped the world over the past 30 years.

  4. Gravatar of Greg Ransom Greg Ransom
    25. May 2010 at 09:51

    Your use of the word “the right” continues to be obnoxious.

    Scott writes:

    “Monetary policy is the Achilles Heel of free market economics. It tripped up Argentina, America in 1929, and Latvia. These are failures of the right, not failures of neoliberalism.”

  5. Gravatar of david david
    25. May 2010 at 11:07

    Singapore doesn’t take a hands-off approach; Lee Kuan Yew publicly interceded in a Singapore Airlines labor dispute, and unsubtly threatened to drag Singapore back to the era of locking up recalcitrant labor or business leaders without trial. This is hardly hands-off.

    Likewise, when privatization of Singapore Broadcasting Corporation went less than optimally, the government didn’t hesitate to keep poking at the supposedly private system until it acted the way it was supposed to act (e.g., the short life of SPH Mediaworks, which was folded back into MediaCorp after a brief experiment in inducing competition in a market too small to support even one company caused both to take losses). The same for public transport (buses have been merged and broken up twice), telecommunications, and finance (Kuan Yew bragged post-1997 about how careful Ministry of Finance management had saved Singapore from crisis).

    The important difference is the priorities of state leadership; state-linked companies are not obliged to maintain full employment. They are obliged to behave in a whatever manner the government thinks businesses should act – hence unprofitable attempts at international diversification in the 80s, then attempts to regionalize and invest in the PRC in the early 90s, as Singapore’s political core guard altered their visions of what Singapore should be like.

    (Of course, these efforts were made because the people leading these businesses were often the same people leading Singapore. Actually the same people, not just appointed by Singapore’s leaders – Singapore is a small enough place for one individual to sit on multiple government statutory and private shareholder boards – and they made political and business decisions based on the same beliefs about the future. It it probably easier to think of Singapore as a multinational with a state attached, than as a state which only just happens to own most of its economic output.)

  6. Gravatar of Bruce Webb Bruce Webb
    25. May 2010 at 12:12

    Scott you might want to look a little closer at Singapore. For example they are often touted for their system of Medical Savings Accounts but the latest detailed study I dug up, admittedly from 1996 showed an extraordinarily tight system of government control over the supply of doctors and an 80% share of hospital beds by Ministry of Health facilities (though the article suggests they were going to a more professional corporation model) Medical Savings Accounts: The Singapore Experience from the study:

    “Class A wards have no subsidy and compete with private sector hospitals, offering private rooms with such amenities as air-conditioning, television and VCRs, in addition to the government’s list of basic services. Care delivered in the remaining four wards – B1, B2+, B2 and C – is supported by varying levels of government allowances. For example, the subsidy level in a class B1 ward is 20 percent of the total charges. Patients are responsible for the remaining 80 percent, which may be covered by Medisave, Medishield and/or personal resources. The fraction paid directly by the government increases incrementally, reaching 80 percent for class C, with the patient responsible for the remainder. As the subsidies increase, the amenities decrease. B1 wards have four beds to a room; B2 patients do not have choice of physicians; class C wards are unair-conditioned, open wards.”

    Have you been to Singapore? I have, its surrounded by jungle and is one degree north of the equator, hot and humid doesn’t begin to describe it. Sure you can keep hospital utilization low and discharge rates high for subsidized patients if you simply refuse to control for tropical humidity and heat for for surgical recovery patients.

    Your analysis suffers from the same huge hole that most such analyses have since the time of Ricardo and Malthus, it either discounts the importance of income inequality in judging comparative economies (Ricardo) or celebrates it (Malthus). Gosh if the Invisible Hand didn’t want people to be poor, why did he give them such a shitty deal!

    Using raw GDP/Capita to judge real cross national economic performance is ultimately the same as using Billionaires/Capita to do the same thing, I don’t think most people in rural Sweden would trade places with someone living in rural S. Korea, or trade life as a worker in Stockholm for life as a worker in Seoul, no matter that your table suggests the latter is at some huge advantage.

    Disclaimer: I am a front page poster at Angry Bear, and we are way more amused than terrified that you are angry at us. Check back in at AB in a couple hours or tomorrow, and don’t forget to bring your blood control medication.

  7. Gravatar of david david
    25. May 2010 at 13:37

    In fairness, those of us who stay in Singapore tend to get used to the heat. Honest. It makes you incredibly lethargic, but you get used to it. And the subsidy cap actually reaches 100% too (the additional 20% is means-tested).

    The actual surprise details buried in Singaporean healthcare are (1) rigorous state control over nutrition and commercially prepared food, well beyond anything Americans might freak out about with fat taxes

    (2) national military service, entailing compulsory physically-demanding reservist training for males up to the age of 40, combined with compulsory (and tested) physical exercise for both genders up to the age of 18

    (3) the Ministry of Health using its market weight to bargain down the cost of consultation and prescriptions. Consultations in Singapore, even in private practice, are cheap – maybe $20 SGD ($15 USD) in a wealthy neighborhood.

  8. Gravatar of Lorenzo from Oz Lorenzo from Oz
    25. May 2010 at 13:45

    Bruce Webb Using raw GDP/Capita to judge real cross national economic performance is ultimately the same as using Billionaires/Capita to do the same thing, I don’t think most people in rural Sweden would trade places with someone living in rural S. Korea, or trade life as a worker in Stockholm for life as a worker in Seoul, no matter that your table suggests the latter is at some huge advantage.
    Inequality just does not matter that much as a separate manifestation. Poor Swedes are about as poor as poor Americans. So, as a comparison of overall economic performance GDPpc, is reasonable.

    Singapore is an odd case because it has such strong information flows that things which would work a great deal less well in larger and more complex societies work reasonably well in Singapore. (I love David’s comment that it is more like a multinational with a state attached.) I am always deeply unimpressed with people who recommend the Swedish model (for example) to a country like Australia or (even more stupidly) the US because the Swedish model developed in a highly monocultural society with excellent communication flows between officials and public based on a deep range of shared perspectives and congruent preference sets. If one wants to see how extensive government provision can be a disaster in the absence of that, examine indigenous policy in Australia.

    As for not moving to South Korea from rural Sweden or Stockholm, South Korea’s per capita GDP is significantly lower than Sweden’s, so no they probably wouldn’t want to move to the country with significantly lower per capita GDP. If one looks at migrant flows, they generally go from countries of lower per capita GDP to higher per capita GDP. For perfectly obvious reasons. (Expressed preference, we might call that.)

    Another comparison: Somali refugees have been moving from Sweden to Minnesota, because their opportunities are much better in Minnesota. Which is again moving from a country of lower per capita GDP to higher per capita GDP. Though the major factor seems to be minimum wages. In Sweden minimum wages are about 2/3rds of a manufacturing worker’s average earnings and Somali refugees have trouble being that productive so are largely locked out of the labour market. In Minnesota, they are about 1/3 of a manufacturing worker’s average earnings and they can be that productive and so can get a job.

  9. Gravatar of david david
    25. May 2010 at 14:16

    oh, and (4): one in four people on the island of Singapore are non-Singaporean; one in five is on a work permit (the other 5% are permanent residents). Singapore being Singapore, if you are on a work permit and fall too ill to work, you are sent home. If you are fired, you are sent home.

    This arrangement is still very much welfare-improving for both Singaporeans and its guest workers alike. Singapore is surrounded by desperately poor regions; compared to those Singapore is a paradise. But it does mean that Singapore never has problems with cyclical unemployment and structural poverty all its it attendant crime and health problems, and a full fifth of its population will never have long-term health problems showing up on its healthcare budget, despite contributing to its state revenue.

  10. Gravatar of johnleemk johnleemk
    25. May 2010 at 16:24

    david’s hitting the nail on the head here. I don’t know as much about Singapore as him, but I lived in Singapore for a while, and spent most of the rest of my life in Malaysia, so I can vouch that everything he’s said is consistent with my experience/knowledge of Singapore and the region in general.

    Singapore is a company, a city, and a state all rolled into one. Generalising from it is difficult. I wouldn’t mind if more cities governed themselves like Singapore, I suppose.


    “Sure you can keep hospital utilization low and discharge rates high for subsidized patients if you simply refuse to control for tropical humidity and heat for for surgical recovery patients.”

    I’m not sure what this is supposed to imply. Maybe it’s because I grew up in and have spent most of my life in such climates, but I would assume public health would be a bigger problem in the tropics relative to temperate climes.

    BTW you are correct about Singapore’s healthcare system being government-dominated. My primary take away is that I wouldn’t mind a city running its own healthcare system, but I’d be pretty terrified of national government-run hospitals. Then again, I’m also a tad terrified of for-profit-run hospitals.

    At home in Malaysia the main hospital I frequent is a non-profit. Malaysia has both federal government-run and private hospitals (the private ones are usually owned by government cronies). The public hospitals are bad, the private ones are extremely expensive.

  11. Gravatar of marcus nunes marcus nunes
    25. May 2010 at 17:27

    “Angry Bear” keeps quibbling…

  12. Gravatar of scott sumner scott sumner
    25. May 2010 at 18:25

    Greg, Did the left advocate those deflationary policies? Was Andrew Mellon a leftist? What’s wrong with the “right?” I am a right wing liberal, I should think that pretty clearly describes my views. If I just say “I’m a liberal” all I do is confuse people. Ditto if I say I am a conservative, or libertarian.

    David, I agree that there have been some interventions, but probably fewer than the 10,000s of ways that the Federal state and local governments interfere in the US. We have had wage/price controls, quotas, occupational restrictions, our health care system is entangled with the government in 1000s of ways. Recall that even in Hong Kong, almost universally viewed as the most laissez-faire economy, the government actually owns most of the real estate. So economic freedom is a relative concept, no country is even close to being pure.

    Singapore has gradually become less statist over time.

    Bruce, Yes, I have been to Singapore, and I believe that the poor in Singapore have the highest living standards in all of Asia, with the possible exception of Japan. It’s not my cup of tea culturally (I prefer Australia) but it’s economy is quite impressive.

    As I said above, of course there are lots of government regulations. The UK is near the top of the economic freedom rankings and yet the government runs the entire health care system (NHS.) The outcomes in Singapore are good–they have nearly the world’s longest life expectancy. Some of that is Asian food, but they are even well above Korea and Taiwan.

    Health care is extremely thrifty (5% of GDP) but I like it that way. If you want more luxury, then pay for it. The key point is that the outcomes in terms of health are good.

    You said:

    “Using raw GDP/Capita to judge real cross national economic performance is ultimately the same as using Billionaires/Capita to do the same thing, I don’t think most people in rural Sweden would trade places with someone living in rural S. Korea, or trade life as a worker in Stockholm for life as a worker in Seoul, no matter that your table suggests the latter is at some huge advantage.”

    This is bizarre for many reasons. First it isn’t true, I’ve never compared Sweden unfavorably to Korea. Second, Korea does not have higher GDP/person. Third, you seem to assume that I don’t like the Swedish model, whereas I have praised their model. I wrote a whole long blog post saying how wonderful the (similar) Danish model was. Google The Great Danes if you don’t believe me. Fourth, I do favor more equal distributions of income.

    You said;

    “Disclaimer: I am a front page poster at Angry Bear, and we are way more amused than terrified that you are angry at us. Check back in at AB in a couple hours or tomorrow, and don’t forget to bring your blood control medication.”

    Of course I was joking, so in the same spirit here is my response to the “front page posters”:

    “I’m quaking in my boots about having to face a blogger who thinks you need to use constant dollars to compare GDP between countries, and who seems to think Argentina and Portugal are better examples of neoliberalism than Singapore.”

    Seriously, this is great fun for me.

    David, Those are good points. I don’t like Singapore’s paternalism, I like their low taxes, free trade, HSAs, pension system, self insurance for unemployment, etc. I like the idea of high personal saving, even if forced, more than high taxes. In other respects I think Denmark and Switzerland are better cultural and political models. And I also like a lot of aspects of the US, Canadian and Australian systems.

    Lorenzo, Those are good points. I’d love to see how the Swedish model works for aborigines, or perhaps closer to home, even for a large Roma community such as Slovakia has. Again, I like Sweden overall, and think they are actually very neoliberal (for-profit schools with a voucher system, for instance.) But the generous welfare state is not transferable. I favor some welfare, and universal health care (which Singapore has.) But the Swedish system requires a level of civic-mindedness that even the US lacks.

    The Somali angle is very interesting. Do you have a link? Has anyone else blogged on that?

    David, What if a migrant worker falls severely sick and is rushed to the hospital? Surely they would get some treatment? I presume you are referring to long term chronic problem like diabetes. Either way, that’s a good point and does make their health care system seem less impressive. Of course this is the age-old dilemma–the nicer you are to migrant workers, the fewer you can afford to hire, and the more that are stuck in their home country with even lousier jobs. Still, it’s sobering to think about.

    Johnleemk, Those are good points. As you may know, I have long advocated cutting big countries like the US up into smaller countries like Singapore, Denmark and Switzerland (which have around 4-8 million people.) I think they are easier to govern. I favor each American state becoming a separate country–as with the EU.

    Marcus, I hope he’s not still obsessing on the Swedish data. Anyway I’ll take a look tomorrow morning.

  13. Gravatar of johnleemk johnleemk
    25. May 2010 at 19:10

    Wow, that response on the Angry Bear is pretty ridiculously bad. I’d reply but I’m sure whatever I can come up with will pale in comparison to Scott’s eventual take-down.

  14. Gravatar of William William
    25. May 2010 at 19:50

    johnleemk, I agree!

    A few “gems”

    Now, that doesn’t mean he isn’t cherry picking the data, but this is one heck of a “trust me” given what he’s trying to sell.

    If he’s as wrong as the title suggests, it should have been fairly easy to find several examples to falsify Scott’s point. I don’t see any.

    But Japan is probably more statist (think the Ministries) now than privatized Argentina

    The Heritage index ranks Japan as the 19th freest country. Argentina? 135. Worse than India!

    As to deflationary monetary policy – exactly how long has Japan’s interest been about zero? So shouldn’t Japan count as a loss in Sumner’s book?

    *grabs popcorn*

  15. Gravatar of david david
    25. May 2010 at 20:01

    Scott, Singapore’s government dominates its entire civil society. While the atmosphere is much less repressive than the late 80s, this is still a country where the government can motivate whole industries toward target policies via some careful public statements without actually legislating anything. Public televised confessions of being a communist agitator were as recent as 1993. The state-owned broadsheet published Lee Kuan Yew returning to prominence threatening to “go to the brink” across the front page, apparently overriding Goh’s more soft-touch government.

    Frankly it is hard to see the US federal government outdoing this. When’s the last time the President threatened to “do you in”? (no, I’m not making that bit up. Kuan Yew can be wonderfully blunt in stating his positions) Singapore has also had wage/price controls, quotas, and health care system entanglements. Occasionally it nudges things around (still), like it did recently with wages as a recession-fighting measure. It just does so with a lighter hand than the elder Lee used to use.

    Is Singapore’s economy effective and competitive? Well, yes – obliged to by international competition, if nothing else. Is it liberalized, or privatized, or free of state coercion and direction? Hell no. Foreign investors can be sure their investments are safe, by virtue of Singapore wishing to continue to attract foreign investment, but anything else is very much up to government policy. Singapore’s 60% GDP government ownership quite possibly understates the role its government plays.

  16. Gravatar of david david
    25. May 2010 at 20:13

    *still the same David

    The threats to “go to the brink” or “do you in” were during the 2003 SIA pilot dispute, not the 1993 arrests.

  17. Gravatar of Sumner is Now More Wrong | economy eyes Sumner is Now More Wrong | economy eyes
    25. May 2010 at 20:52

    […] there’s a a response from Sumner to my critique of his earlier post. And he clearly doesn’t get it. Again, I’ll focus on […]

  18. Gravatar of johnleemk johnleemk
    25. May 2010 at 20:57


    You also missed the attempt to justify using inflation-corrected dollars as equivalent to PPP (which people have already jumped on in the comments), and the suggestion that Scott opposes pegging of the exchange rate in all cases. Equating Singaporean and Argentine monetary policy…it boggles the mind.

  19. Gravatar of marcus nunes marcus nunes
    26. May 2010 at 05:06

    You had an impact at “Angry Bear”. Now, another “AB” (Spencer) comments on the comment!

  20. Gravatar of Christopher Hylarides Christopher Hylarides
    26. May 2010 at 06:55

    OK, so the point is that in Singapore the “quasi-government” companies actually compete properly vs state owned firms elsewhere. In other words, the government isn’t willing to piss money into companies just to maintain industry.

    That being said, the SG government does control the social lives of its citizens quite extensively. Chewing gum is illegal and they’re very strict with their laws.

    Also, the people who are saying that emulating singapore elsewhere isn’t feasible are pretty much correct unless we’re willing to break up most countries into city-states. Their policies would not work when you have urban/rural divides in countries hundreds of times larger. On top of that there are cultural reasons it may not work elsewhere.

    Still, I guess Hong Kong is still the best example of an open market even though they have a lot of government control over their housing.

  21. Gravatar of ssumner ssumner
    26. May 2010 at 09:34

    Johnleemk and William, I have a new post. Probably not as entertaining as William hoped for, but I made some of the points William anticipated. I felt the first reply sounded a bit too arrogant, as I didn’t realize their blog was a lot of average bloggers, I thought he was some big-time economist. So I tried to tone it down a bit, but still make my points.

    Hopefully he’ll say “no mas,” as I really don’t have time for this.

    David: You said;

    “Frankly it is hard to see the US federal government outdoing this. When’s the last time the President threatened to “do you in”?”

    Governments in the US go after unpopular businessmen all the time, although I admit they aren’t so arrogant as Lee. We do have more constitutional protections. Again, I am not trying to defend Singapore, but they rate number 2 in the world in both surveys, so they can’t be that statist, can they?

    I think there is an error in just noting violations of laissez-faire, every country has lots of them. You need a more systematic study, which is what Heritage and Frasier do. I read an entire book on Singapore, and believe me they have some really sound poolicies in many areas, some of them liberal like universal health care, very strong environmental protections, and Pigou taxes. I see Pigou taxes as pro-market, but I understand someone else might see them as anti-market.

    Christopher, You said;

    “Also, the people who are saying that emulating singapore elsewhere isn’t feasible are pretty much correct unless we’re willing to break up most countries into city-states. Their policies would not work when you have urban/rural divides in countries hundreds of times larger. On top of that there are cultural reasons it may not work elsewhere.”

    I have advocated breaking the US up into 50 countries, with average populations slightly larger than Singapore. The urban rural thing doesn’t explain anything. Only 2% of Americans are farmers. There is no reason why a big country couldn’t adopt their system of ultra low taxes, national health care through HSAs, forced saving for retirement and unemployment insurance, free trade, Pigou taxes, etc. In any case, if you are right the same argument could be made about Sweden, or any other model. In that case we are stuck, and shouldn’t even both discussing government policy.

  22. Gravatar of Lorenzo from Oz Lorenzo from Oz
    26. May 2010 at 14:39

    Scott, there was a piece in The National Interest a few years ago which touched on this. An online “quickie” piece is available here. The economic historian Benny Carlson has done work on the comparison, but apparently in Swedish.

  23. Gravatar of DanC DanC
    26. May 2010 at 15:12

    Friedman saw tort law as a way to protect property rights. The key for Friedman, on environmental issues, is property rights.

    “As we head into the next millennium, it becomes increasingly clear that the progress we have enjoyed is primarily attributable to the freedom of the marketplace and Milton and Rose Friedman have done much to ensure that we have come far on this path. It is important to continue their work by ensuring that the property rights path to sustainable development is made more visible in order to protect the institutions of freedom and the environment at the same time-only then can we have our environmental cake and eat it too!”

    I repeat again that Prof Friedman on many occasions mentioned how much he admired Terry Anderson of the Hoover Institute and his take on environmental economics. I can not find nor do I recall Friedman speaking on strictly environmental issues at any length. I do remember him referencing Mr Anderson for those interested in the topic.

  24. Gravatar of david david
    26. May 2010 at 17:03

    Fair enough. I don’t put as much stock in Heritage or Frasier ratings as far as Singapore (or Hong Kong) goes; both tend to overlook informal or less formal coercion mechanisms, especially if foreign investors are not affected by these measures.

  25. Gravatar of scott sumner scott sumner
    27. May 2010 at 06:34

    Lorenzo. Thanks, I will use that sometime.

    DanC, Thanks, I don’t have a lot of time now to look at this stuff. Am I correct in assuming that Friedman would favor ideas like setting up property rights via tradeable quotas for fish in the oceans?

    David, Yes, you may be right, but again the question is how far off they can be, especially if every survey is saying the same thing. In another post I emphasized that in 8 of the 10 categories of the Heritage survey (everything but spending and taxes) Denmark is the most free market economy in the world. So I have a rather eclectic take on this whole issue, and think there are interesting things to learn from lots of different countries.

  26. Gravatar of Fred Fred
    27. May 2010 at 18:44

    Any discussion (meaning attempt at) with the bunch at Angry Bear is going to devolve into fierce mud wrestling around their fixed ideas. Anything new gets dragged into the mud, obfuscated, and drowned.

  27. Gravatar of Scott Sumner Says What We’ve Been Waiting For Scott Sumner Says What We’ve Been Waiting For
    28. May 2010 at 06:14

    […] been tip-toeing around it for over a year, but this is the clearest expression I’ve yet […]

  28. Gravatar of ssumner ssumner
    28. May 2010 at 06:38

    Fred, Is their perspective straight liberal, or do they have their own take on things?

  29. Gravatar of DanC DanC
    28. May 2010 at 09:56

    This thread maybe dead but yes, Friedman would support, I think, trade

    Plus after the fall of the Soviet Union Friedman at first said privatize, privatize, privatize. However with the rise of cronyism and the rise of private monopolies he talked about the importance of the rule of law.

  30. Gravatar of ssumner ssumner
    29. May 2010 at 06:10

    Thanks Dan.

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