Free Markets Matter – Part 1
External to economic and financial considerations, comparisons of the ease of doing business within one geographic area versus another encourages a discussion of Free Market economies (Capitalist) and Centrally Planned (Communist) economies. The degree to which government controls the flow of capital and indeed owns production differentiates the two systems. However, considerations beyond government control of capital affect the status of quality of life comparisons between citizens of each type of economy.
The World Justice Project (WJP), a non-profit organization with international membership, defines the Rule of Law within the framework of four principles. Since an international group of experts developed the four factors, cultural biases should be minimal. The four principles are:
Accessible and Impartial Dispute Resolution
To further delineate these principles, WJP developed nine indices defining the means of actual demonstration and implementation of the Rule of Law. Each year, the WJP publishes a Rule of Law Index for 126 countries and provides a summary for download on its site. The Rule of Law Index 2019 Insights publication can be found here. Europe and North America dominate the top ((most favorable) rankings in the list, along with Australia, New Zealand, South Korea and Japan. Therefore, when thinking of advantaged environments for generating wealth, protection under the law must be considered in addition to locational and social factors. One can only imagine helplessly watching a rival profit from your original, owned idea or invention without any prospect of legal recourse for infringement within one of the lower-ranked countries without an adequate Rule of Law.