Monday, September 24, 2012

Property Rights Equals Prosperity Equals Freedom

Folks rarely think about what makes human societies prosperous. Some folks are sufficiently delusional to believe that prosperity comes from the government, considered by many to be the cornucopia of plenty. The truth is that government is a prosperity destroying machine and the more power government has the greater its ability to enforce perpetual property.

 Prosperity is derived from only one source: secure property rights. Failed and impoverished nations suffer a severe deficit of secure property rights. The International Property Rights Index tracks the security of property on a nation by nation basis. The criteria includes:

1. Overall Score

2. Legal and Political Environment (Judicial Independence, Rule of Law, Control of Corruption, Political Stability)

3. Personal Property Rights (Protection of Physical Property Rights, Registering Property, Access to loans)

4. Intellectual Property Rights (Protection of Intellectual Property Rights, Patent Protection, Copyright Piracy)

Nations with the most secure property rights are:

1. Finland         8.6
2. Sweden        8.5
3. Norway        8.3
4. Singapore     8.3
5. Switzerland   8.3
6. Denmark       8.2
7. Luxembourg  8.2
8. New Zealand 8.2
9. Netherlands   8.1
10.Canada        8.0
11.UK              6.9
12.Hong Kong  7.8
13.Austria        7.8
14.Australia     7.8
15.Germany     7.7
16.Japan          7.7
17.Ireland        7.6
18.Belgium      7.5
19.US             7.5
20.France       7.4

The US continues to decline in secure property rights, largely because the growth of government power has directly slashed the security of property rights in a nation that once was the most prosperous nation on the planet because of the security of its property rights. As America nosedives into the collectivist cesspool of statism, the middle class is vanishing, the poor are getting poorer and prosperity is nothing but a distant memory.

Even more interesting is the Prosperity Index.  The most prosperous nations are:

1.  Norway
2.  Denmark
3. Australia
4. New Zealand
5. Sweden
6. Canada
7. Finland
8. Switzerland
9. Netherlands

It's no coincidence that nations with the most secure property rights also happen to be the most prosperous.  If we look at the poorest countries it's clear that they are poor precisely because they lack secure property rights.

The entire Middle East and the Muslim world is deficient in secure property rights. Hence, it's got some of the poorest nations on the planet.  However, the Muslim world just isn't deficient in secure property rights, it's massively deficient in political freedom and social issue tolerance.

The flow of capital, the lifeblood of economic prosperity, absolutely does flow to nations with political stability, liberty, tolerance and secure property right because these are all significant components in the equation to achieve prosperity.

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