NCPA - National Center for Policy Analysis

Globally, Leftists Tilt Toward Economic Freedom

May 26, 2000

Paradoxically, labor and left-of-center governments are initiating pro-market reforms in some countries.

  • In the United States, President Clinton -- whose Democratic Party has a history of enthusiasm for paternalistic government -- came around to the position that welfare was out of control and needed major reform.
  • Beginning in 1984, New Zealand's labor government privatized the postal system and many other public enterprises, reduced tariffs to one of the lowest levels anywhere, and initiated labor reforms which gave employers much greater flexibility in dealing with unions.
  • In Mexico, the Institutional Revolutionary Party -- long an enthusiast of government ownership of heavy industry, high protectionist duties on imports, and detailed regulation of labor and financial markets -- switched to a program of support for privatization of government-owned enterprises, partial privatization of the country's social security system and advocacy of free-trade agreements with the U.S.
  • Argentina's Senate under a new center-left government has passed labor-market reforms that give employers much more flexibility in hiring and firing.

Leftist governments were elected several years ago in both Germany and France. Germany's government is proposing to slash corporate taxes, encourage business startups, and provide tax breaks for private pension plans. In France, the government has quietly liberalized the labor market and promoted a more globally competitive financial system with reduced government controls.

Source: Gary S. Becker (University of Chicago and the Hoover Institution), "Egads! The Left Is Unchaining the World's Economies," Business Week, May 22, 2000.

 

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