In a recent interview with the Financial Times, Vladimir Putin boldly declared that “liberalism is obsolete.” Indeed, the Russian president claimed that liberal ideas have “come into conflict with the interests of the overwhelming majority of the population,” as opposed to boosting prosperity and human welfare. As the number of European populist parties swells, it appears more and …
In a recent interview with the Financial Times, Vladimir Putin boldly declared that “liberalism is obsolete.” Indeed, the Russian president claimed that liberal ideas have “come into conflict with the interests of the overwhelming majority of the population,” as opposed to boosting prosperity and human welfare.
As the number of European populist parties swells, it appears more and more people are buying into the same anti-liberal sentiment spouted by Putin.
But thankfully, for the more than seven billion people who call this planet home, liberalism continues to benefit and enrich humanity — not undermine it.
Each year the Fraser Institute, a Canadian thinktank, publishes its Economic Freedom of the World (EFW) report, ranking the market liberalism of 162 economies using five metrics: size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation.
As I have previously noted on CapX, people in the most economically liberal quartile of nations have an average income more than seven times higher than those in the most illiberal societies ($40,376 and $5,649 respectively). At the bottom of the income distribution the difference is even more pronounced – the poorest decile of workers in the most liberal countries earn almost eight times as much as the bottom ten per cent in the least free economies.
For most people, this disparity simply translates into whether or not they can afford to eat. In his weekly Telegraph column, Boris Johnson got it right when he noted “a direct connection between liberal values…and successful wealth creation”.
Critics of economic liberalism might point to the rise of China, with its authoritarian government and heavy state involvement in the economy. Yet even in the world’s newest superpower, average incomes remain low by Western standards and, as George Magnus has argued persuasively, it is at serious risk of getting stuck in the ‘middle income trap’. Indeed, it is the very lack of liberal, accountable institutions and the rule of law that has exacerbated the long-term economic issues facing the country.
It’s worth noting that the liberal ideas Putin dismisses as inept extend far beyond economics. People don’t move to more liberal nations solely for economic opportunity — often, they do so to escape the tyranny of illiberal societies and find personal freedoms that would be unimaginable in their home country.
Often these people crave the freedom to love who they want, practise their faith and express their dissatisfaction with government institutions without fear of harassment, imprisonment, or even death. These are the key liberal values Putin eagerly castigates.
But his anti-liberal ideas certainly haven’t served the Russian people very well. Russia remains a place where journalists are often killed, political opponents or dissidents jailed, and it’s dangerous to be part of the LGBT community. Russian power belongs to a small clique of Putin cronies and oligarchs, so it’s no surprise that the government doesn’t serve the interests of the Russian people.
GNI per capita has declined for each of the last five years and is now 32 per cent lower than in 2013 (a relatively low $10,230). Annual growth remains sluggish and, with Putin’s failure to allow the Russian economy to diversify away from reliance on natural resources or to tackle Russia’s declining population, the situation in the country will likely worsen. Ironically enough, it’s market liberalism that could fix these problems.
As conditions in Russia deteriorate, the Fraser Institute’s Fred McMahon predicts Putin will continue to ramp up the promotion of illiberal values overseas and throw his weight around Russia’s sphere of influence. A weakened Russia is “little more than a god of mischief in the pantheon of powers,” notes McMahon, and while “these gods (of mischief) can create great horrors and tragedies,” their ability to export anti-liberal values abroad is limited since the rise of liberalism.
When we hear despots like Putin decry the value of liberal ideas, we should simply take a look at the numbers. Unfortunately, those numbers aren’t helping the Russian people, since Putin is ensuring his country continues down the road of repression, economic stagnation and global irrelevance. But for much of the rest of the world, liberalism remains alive and well. Let’s keep it that way.