Economic Freedom in Action: Changing Lives – Full Video


Next, a beekeeper from Chile fights a world
bee crisis. A Zambian businesswoman helps rural farmers
improve their lives. And a North Korean defector helps his fellow
refugees. All examples of the power people have to make
significant change when finally given the chance. Major Funding for this program was provided
by: Donald and Paula Smith Family Foundation Additional Funding was provided by: David and Annette Jorgensen Foundation, and Chris and Melodie Rufer We were seven girls in the family and one
boy, and this boy was the last born. The fellow villagers kept on laughing at my father. I
started asking myself, is it a crime to be born a girl? So it was from that time I declared anything
that a man can do, I can also do it. In South Korea, everyone is entitled to have
a dream, which is a huge difference from North Korea. You may say it is heaven and hell. We are still very young; every country needs
a lot of years to get the old bad stuff out, and change it for something which is better
or good. If I make a decision and if it’s not the best
one, then I’m the one who’s going to suffer. So this was the tough part that I didn’t think
before. We have 3 children and we have to make efforts
for their sake. We fight for them, to give them something better, to give them a better
future. A better future. That’s a goal all of these
people – indeed, all of us – have in common. In a moment, we’ll share their remarkable
human stories – of survival, triumph, and lives in transition. They’re also stories
of nations transforming themselves in ways that are allowing people to rise out of poverty,
and take control of their own future. From Zambia to South Korea, from Slovakia
to Chile, newfound economic freedom is changing lives. I’m Johan Norberg, and I’ve been studying
economic freedom for decades. What is it? And what impact does it have on people’s lives? In the last 100 years, the world has created
more wealth, reduced poverty more, and increased life expectancy more than in the 10,000 years
before. Since the beginning of recorded history until
the year 1800, the average person’s income barely changed. But in the 200 years since,
they’ve increased by 2000%. How did that happen? And what role did economic freedom play? I’m here in Montreal, Canada outside the offices
of the Fraser Institute, whose work on economic freedom has become the gold standard used
by economists, researchers and policy makers around the world. The Institute has developed an objective way
of measuring the economic freedom of a country, and they’ve created a report that I’ve often
used myself in my writings and lectures. But the Economic Freedom of the World Report
is not just about numbers and charts and graphs. No, it’s really about people, people who want
the opportunity to work hard to become self-sufficient and independent, and to improve their quality
of life. Our story begins in the African Republic of
Zambia. In 1995, this landlocked nation was one of the lowest-ranked countries in the
Fraser report, but today Zambia is one of the most economically free nations in Africa.
In just 15 years, this impoverished African nation has increased its economic freedom
to a level comparable to Poland and France…opening doors for people like Sylvia Banda. I started business at the age of 12. I was
making fritters, and I’d put them in the basket take them to school. I’d sell them to my friends.
It would make me very happy. After working her way through college, Sylvia’s
first official business was to open a small, one-room restaurant. I didn’t have anyone to go around and tell
the people that that particular day I was opening the restaurant. So I started frying
onions which I brought from home, the garlic and green pepper. And each time I fry, fry
I cover it, then I put a bit of water, again I will cover it. I will allow the steam to
come out; again I will cover it until the whole place was covered with steam. Then I went to the windows, I opened. I went
to the door, I opened and I could see the steam rushing to go out, very nice scent.
Then five, ten minutes later people started to come in. Mmmm, mmm we have found a very
nice scent. At lunch hour people started coming and I
was very, very happy. Then after some time I saw that people are standing with their
plates in their hands. Then I realized I said, oh I made a very big mistake. I had no tables
and chairs! Sylvia quickly realized there was more to
running a restaurant than cooking food. But with no money, she had only her creativity. So I went to my neighbor who was into carpentry.
I said, Patrick, supposing I started giving you free meals, three every day? He says, “…and in return?” I said in return
you make me one chair. So straight away we started the barter system. From this modest one-room beginning, Sylvia
Banda expanded her business to include extensive catering, a school for restaurant service
workers, and the processing and nationwide distribution of Zambian foods. Her company,
Sylva Group, is now one of the strongest food service corporations in all of Zambia. In 2001, Sylvia’s husband, Hector, left a
successful executive career to join Sylvia’s expanding company. She made me an offer I couldn’t refuse! Since we were also getting on in life, I thought
it provided a good opportunity for us to grow old together in joy. In 2010, the World Bank named Zambia one of
the world’s fastest economically reformed countries. Today, the people of Zambia are
improving their lives in real and tangible ways. It was not always so. For over 70 years, the region was colonized
by the British. Zambia became an independent country in 1964. The average African Zambian did their business
on a sack in front of a store. They weren’t allowed to be in the store, they had to be
outside. So when the country became independent, the average Zambian didn’t have any kind of
economic business training. They had to learn it on the go. Since African culture was essentially tribal
and community-based before colonization, many Zambians saw socialism as a return to their
traditional way of life. Kenneth Kaunda, was head of the socialist party, UNIP, and was
elected Zambia’s first president. He soon banned all other political parties, and for
nearly 30 years maintained absolute power. During his tenure illiteracy rose, communal
farms failed, foreign investment lagged, and Zambia was drowning in debt. Leaders grew
wealthy while the majority remained in poverty. The first government, our president was not
very much encouraging workers to be business people. Even those who had businesses, we
were doing it with a lot of fear. Finally, Kaunda was pressured to reinstate
a multi-party democracy and in 1991, Frederick Chiluba was elected president. Chiluba shifted
policy to focus on small businesses, property rights and the privatization of key industries.
The transition was difficult and corruption widespread. But out of this, a new Zambia
was born. Private sectors were encouraged to participate
and engage in businesses and to be proud to own property. So that also helped Sylva Catering, which
was a private organization, to start looking into other ways in which we could promote
ourselves as a company that was serious about contributing to the Zambian economy. In Zambia there was a time when we had droughts
for two years. And this is the period where we started receiving relief food, and people
became handicapped. I think the dependent syndrome was quite high because we were receiving
food from the government. People did not want to go back to the land.
They wanted to continue just receiving the foods. So this is what prompted us to say, what is
it that we can do? We decided to open a new company called Sylva
Food Solutions. Sylvia and Hector Banda’s new business would
focus on the distribution of locally grown Zambian foods. But getting produce from farmers in the remote
countryside proved a challenge, as was creating a process to maintain modern standards for
food quality. Then Sylvia discovered the breakthrough concept.
She would ask the farmers to dry their crops at their own farms, making the produce more
practical to transport. She would offer them training on solar drying, along with classes
on hygiene. Regional non-profits supported by foreign
aid had offered such training in the past, but with little result. Judith Mwila worked
with such programs. They would pay the farmers a certain amount
of money and offered to train them and teach them certain techniques of preserving foods.
But obviously that was not a sustainable way of training the farmers, because for as long
as the farmers were doing it for the purposes of getting some monies; they were not doing
it for the interest of it. And also they did not understand how useful this would be to
their lifelong skills. This time, a good crop with greater income
would be the motivator. Farmers would not be paid for attending training sessions, but
at the end of the season, if their produce passed inspection, Sylva Group would purchase
their entire crop. It was a major turnaround. Across all of Zambia, farmers who participated
in Sylvia’s new program dramatically improved hygiene and output. I’m a farmer. I’m here in my field at Kanda.
Since I’ve been born, this has been my field. It’s rice as well as maize, vegetables, as
well as mango. It’s important to teach farmers how to preserve mango because you will find
during December and January, mango just goes rotten. Farmers, who have money in their pockets,
sell the mangos as well as the vegetables. We will have money, and hunger will not prevail. Before we began supplying things to Sylva
Foods, my husband and I were farmers doing small gardens. My education is quite humble
and my husband’s education is quite humble. We heard about Sylva Food Solutions and did
the training, and then they would buy our vegetables. Our way of life has changed. Before that happened,
our children never went to school. We tried for a bit of time, but we could not find the
money to pay. But once we finally were able to sell our produce and grow even more, we
were able to send all our children to school! Our life is very different now. When we train, we visit them to find out how
they are doing. They encourage us quite a lot, especially when you are talking about
children who are very young. You are glad that they have gone back to school. You become
very, very happy. Today, we find that most of the city has Zambian
owned shops, and most of the trade that is taking place on a retail level is owned by
indigenous Zambians. So, we’ve seen Zambians move every decade up the ladder of success
to more and more complex business activity. Through the liberalization of the economy,
through the encouragement of government for people to own property, there is what is called
economic empowerment. Zambians, now more than ever before are taken charge of their lives,
which was not there before. Zambians are doing it for themselves and the future is very,
very bright. I’m here today to meet with the authors of
the Economic Freedom of the World Report and find out about their process of measuring
countries, like Zambia. Gentlemen, thank you for joining me. What
is this report? And how does it work? Well, it’s really an effort to view the world
through the lens of opportunity and control over one’s life. Essentially institutions
and policies influence the opportunities that individuals have in terms of choosing their
own occupations, choosing entrepreneurial activities, engaging in trade with people,
and perhaps most importantly, the opportunity to keep what they earn. And we thought it
would be interesting to see how those changes affect the economic freedom of people. So the idea was try to quantify this, so we
had to collect data on a lot of countries, data from the World Bank, the IMF, other reputable
sources. And then we put it all into the computer, we worked on it for many, many years. Jim
had some health problems and lost his eyesight so that set us back a little bit. But we persevered
and after almost seven or eight years, we finally came out with a good report. So you’re basically looking at the kind of
things that would give people power over their incomes, their wealth, their jobs, the freedom
to start a business, to trade? Precisely…precisely. Our story continues in a divided land. Until
the end of World War II, North and South Korea were one nation, one culture. Today they are
two drastically different countries. Dae Sung Kim knows both. When I escaped from North Korea, I was 27.
I crossed the Changbai Shan River into China. There were too many North Korean security
guards patrolling there. So I walked the mountain trails at night with
no food for a week. I went hiding during the day, and walked the trails at night again. In desperation, Dae Sung Kim fled North Korea.
He had been trading goods across the border in China to provide for his parents and siblings,
and had learned he was on a watch list for illegal trading. His life was in danger. He and his younger sister would have to flee.
In the dark of the night, they crossed into China. I was not without fear. It was the fear of
getting caught, and eventually getting shot to death if brought back to North Korea, and
the fear of punishment to my family. Defectors who are caught and returned to North
Korea face imprisonment, torture and often execution. Nearly 3,000 North Koreans escape to the South
each year. I brought my younger sister with me. Unfortunately,
in China we were separated. While I was away, someone kidnapped her. After
losing my sister, I came to South Korea alone. Dae Sung hoped he could do more to find his
sister from the safety of the south. When I first arrived in South Korea, I worked
for a delivery service before enrolling in Hankuk University. While studying at the university, Dae Sung
received a call from South Korean authorities. His younger sister had been found. My younger sister had managed to escape to
South Korea. She told me that our older sister had also
escaped, and was living somewhere in China. So I arranged to bring my older sister here
to South Korea, too. One of the most repressive regimes in the
world today, North Korea has maintained an aggressive policy of international isolation. A leading scholar on North Korea is Andrei
Lankov. It’s very simple story in North Korea. It
began as a Stalinist country and in the late 50s it decided to become hyper-Stalinist.
They developed an economic model which Joseph Stalin himself would probably find somewhat
excessive… Everything was rationed. The government decided how much grain, or soy
sauce, or clothes you should consume depending on your place in the official hierarchy. This economy did not work. And when the Chinese
and the Russians stopped providing aid in the early 1990s, the North Korean economy
essentially collapsed. The regime was unable to adapt. They could
no longer provide the food on which its people had depended. Famine was widespread. It is estimated that at least half a million…
and possibly as many as 3 million North Koreans starved to death. There were times when I went without food
for a whole week. During those days, my only dream was to eat a stomach-full. When I came to South Korea, I saw food was
plentiful. Nobody seemed to care about eating a stomach-full. They have other dreams instead. How did this incredible contrast between North
and South Korea come to be? For centuries, North and South were one unified
country, living under the shadow of its three larger neighbors: Russia, China, and Japan.
In 1910, Japan claimed the Korean Peninsula for itself, and went on to occupy the region
for 35 years. When Japan was defeated at the end of World
War II, Korea was finally liberated by the Allies. But there were two visions of a post-war Korea:
A Soviet vision of a centrally-planned economy to oversee the North, and an American vision
of free enterprise to restructure the South. Eventually the peninsula was split in two. Tensions remained high, culminating in the
Korean War from 1950 to 1953. Most of the fighting was actually done on
the South Korean side. A lot of it was destroyed. All of the industry that had been built up,
that was all leveled. Everything you can see has been built over
last few decades, and it began absolutely from scratch. It was a country of unpaved
road, oxcarts and thatched roofs just 40 or 50 years ago. For years following the war, South Korea was
governed by a series of military dictators. The country languished in poverty. Then, in 1961, a new dictator came to power.
General Park Chung-Hee wanted to grow Korean industry, and engineered nationwide economic
liberalization. For the first time in Korean history, private
property rights were truly protected. He liberalized markets more than they had ever been before. It made South Korean economy to explode, I
mean grow very rapidly. In some year the rate of increase of per capita income was more
than 12 percent. The average growth was almost 9 percent per year. It was incredible! As South Korea developed its market economy,
demands for legitimate political rights erupted. South Korea’s first non-military president
was sworn into office in 1992. If you look at history, a great deal of economic
success stories happened under control of the authoritarian governments. Once modern economy starts to grow it produces
middle class. It produces people who are independent minded, who don’t want to be bossed around
by a guy in the presidential palace or royal palace, who sooner or later begin to demand
political participation. This is what happened in South Korea. It was a country of subsistence
farms. It was transformed in 30 years, in one generation,
into an extremely well-educated country of skilled workers, of professionals, of university
students, and these people did not say “thank you” to the dictators. They said “Enough!” Political democracy does not always guarantee
economic freedom. Very often, the majority of the people want big government. Majority
of the people want to tax the rich people and redistribute it among themselves. The name of that sentiment is the economic
democracy, it’s not economic freedom. So we have to be very careful about political democracy,
in order to protect economic freedom. After completing his university degree, Dae
Sung Kim built a venture capital company with a focus on small businesses run by fellow
refugees from the North. The North Korean defectors have no relatives
in the South. They are mostly single, and have no property. So borrowing money is the hardest thing for
them, and also the most important thing. Dae Sung meets regularly with the various
owners to discuss business issues, cultural differences, and basic moral support. North
Korean refugees have many challenges. They often change their names, in order to avoid
arrest and reprisals to their relatives who are still living in the North. Then, they
find they are not so easily integrated into the south. Ok-Bun and her family escaped from North Korea
2 years ago. OK-BUN: I escaped with my husband, myself,
and two sons. Mr. Kim helped us with loans. That was how
we got started. We figured that the plastic recycling business
has a better competitive edge than other businesses, so we decided to take a risk by loaning them
money. By no means is plastic recycling an easy business.
My body aches all over. It is hard work. We hope to be in a situation to transfer an
established factory to my son in the future. Young-Gum fled North Korea with her family
in 2008. There was hardship in the beginning. A lack
of capital was one thing. It’s been almost a year now. We went through hard times, but
we learned a lot. Just being here like this is a dream. In North
Korea, survival itself was too tough… too tough. So I never dreamed of such things as
I now have. I expect that someday North Korea will open
her doors. When it does happen, the former North Korean defectors will be experienced
business people backed with funds; then we’ll be able to play our roles in the reconstruction
of North Korea Dae Sung’s venture capital company has funded
29 small businesses to date. My sisters are all engaged in running a business
of their own. We all want to visit our parents’ gravesite someday, and want to play a role
in helping North Korea become a wonderful country. Today, South Korea is ranked 37 in the Fraser
Economic Freedom of the World Report, putting it in the top quarter of nations measured.
North Korea is not included in the report due to a lack of reliable data. But we know
that it is one of the world’s least free economies. Guys, you’ve been using this report to rank
countries for the past 17 years. What have you learned from the analysis of the data? Well, one of the most important things we’ve
learned is that countries that are economically more free grow more rapidly, and achieve higher
income levels. And in fact, not just a little bit higher income levels… but a lot higher
income levels. For example, the per person income of the highest quartile, the highest
1/4 of economically free countries is 7 times what the figure is for the lowest group, so
that’s a huge difference. But it’s not just about rising incomes overall,
it’s also about the poorest of the poor. If we look at that bottom quartile, the poorest
10% of those societies have average incomes of about $1,200 per capita. If we look at
the upper quartile, the “most- free” quartile, they have average incomes of over $11,000.
Now that’s not a lot to live on, but it’s a whole lot more than $1,200. So, as people work their way out of poverty,
that’s a substantial improvement in their quality of life. It’s not just about the quality of life it’s
about the quantity of life. If we look at the most-free countries, and compare them
to the least- free countries, the most-free countries have substantially higher life expectancies,
18 years. You know, a lot of that relationship is probably
driven by the fact that more-free countries have higher incomes, better sanitation, nutrition…things
like that. You know if you live to be 80 versus 60, that’s
the difference between getting to know your grandkids, see your grandkids grow up, see
your great grandchildren. Economic freedom…sure it’s about income,
it’s about growth, but it’s also about the quality of life and knowing your grandkids
or not. And if you have more economic freedom- you have a better chance of knowing your grandkids,
and that’s more important, or as important- as how many cars are in the driveway and things
like that. Our next story brings us to Eastern Europe.
For 40 years, the small country of Slovakia was one of several Soviet-controlled nations
held behind the Iron Curtain. At that time Slovakia and the Czech Republic were united
as one nation, called Czechoslovakia. In 1989, Czechoslovakia liberated itself from
Soviet control. Virtually overnight, their communist nightmare had ended. But after independence, people struggled through
the tumultuous years that followed, people like Olga Rybarikova and her children. The past regime, the communist regime, was
very harsh for people living in this system…especially for free and open-minded people. There weren’t any opportunities for me, because
as soon as you would stand out of the crowd a little bit, they were trying to put you
down immediately. We weren’t able to travel abroad freely, there
was no freedom of speech, very limited opportunities; it was a true dictatorship. Olga Rybarikova lived the greater part of
her life under communism. Throughout those brutal years she struggled to provide for
her two small children, Katarina and Erik. For a child living in the Soviet Union it
was different, because you didn’t see all the politics, of course, you didn’t care as
a child. But if you grow thinking about all this, more and more, it was really not comfortable.
The controls were very, very tough. I know some stuff because my mom was talking
about it a lot. I didn’t have the option to do what I wanted to do, so this is the thing
that I cannot imagine. People, who have not experienced living in
such a system, can’t imagine what it was like. From the collapse of communism through the
uncertain years that followed, Erik and Katarina would grow up. As democracy was regained, Czechoslovakia
experienced a brief period of celebration. But the economy had been devastated, political
corruption was widespread, and unemployment was soaring. Slowly the Czech region began to stabilize,
but the Slovak region lagged farther behind. Then, in 1993, the two regions split into
the Slovak Republic and the Czech Republic. Slovakia was now truly on her own. The communist leadership was blaming the imperialists,
United States, capitalists, all kinds of, you know, enemies that were cause of the failures
of the communist system There was finally no one to blame for our
own mistakes. We were learning the lessons from these mistakes, and we were also preparing
the strategies how to be more successful country. Ten years after democracy and freedom came
to Slovakia, the country was still struggling. In 2001, unemployment was nearly 20%, the
highest in all of Europe. The new nation had hit an economic wall. There were many situations when I would tell
my kids it would be better, because I had the feeling they are very capable people,
they are fighters. But I was also telling them that maybe it
would be better for them to leave the country. Even if we now lived in a free country, democratic
country, there were many things I didn’t like here. Well, it wasn’t easy. It was really so bad,
so I think that we should talk about it more. I have really bad feeling, and this is still
inside in us because of what happened. Still we feel the freedom, but we are afraid of
what happened in the past. And this is really, really difficult. The Slovakian people made a dramatic change
in direction. They voted for sweeping open market reforms including a flat tax of 19%,
more flexible labor regulations, and privatization of their pension system. These changes were difficult, but within 5
years, business owners had newfound access to financing, the black market shrank, and
foreign investment came into the country. Slovakia’s unemployment dropped to 7.5% and
its standard of living increased dramatically. The economy started to perform, Slovakia made
a transformation from the country that was lagging behind the neighbors, Czech Republic,
Hungary, Poland and that adopted two waves of serious economic reforms. These reforms
put us ahead of the countries where we lagged behind in the 90s. That was our way, how we
catched up, with the more developed countries. Slovakia had finally made the transformation
from an Iron Curtain state, to a thriving European nation. And starting one’s own business also became
a real possibility. Katarina Rybarikova had an idea… she would bring the growing Paul
Frank brand, with its distinctive monkey logo, from America to Eastern Europe. It was almost six years ago. We didn’t know
Paul Frank people so I found some address online. I Googled a lot of stuff about Slovakia
and all information they would be interested in. Okay, let’s do small presentation and
we will see how it goes, maybe they will be interested in Slovakia. So, we flew to L.A., we met with owners, and
that’s how we started Now we are the only official Paul Frank store
in Europe. It was really so easy. Katarina has hired her brother, Erik, to manage
product research in her growing business. Their mother, Olga, is the bookkeeper. Katarina is a fascinating person, and I’m
not saying that just because she’s my daughter. I’m very proud of her and Erik, of what they
have achieved, and I’m happy to be a part of such a company. This is a family business, always we discuss
about, what could be the best. We have opinion also from our mom, which is different generation.
That mean you get different point of view on the product, and we decide which one is
the best and we go for it. The feeling is very good because you do it
as a family together. What I feel now is definitely hard, it is
difficult, but every job is difficult… nothing is easy. But the feeling on the end of the
day is definitely the best. We’re definitely growing. I would say 30-40%
up. Even if the market is shaky in Europe, I mean we had so many problems with situation
in European Union, but it’s still growing, so it’s a good thing. In the communist regime, when my kids were
small, I’d have never thought that they could possibly achieve something like this. We have gone through three very fundamental
transformations. One was the economic transformation from centrally planned economy, to what I
would call the market economy. Then there was this political transformation
from totalitarian state to democracy, including building the independent Slovakia. The most important transformation of all?
It is the transformation from paternalism to individual responsibility. State paternalism
has not only the ugly face of the communist rule, but it has a sort of very nice face
of the social welfare state of the Western style. If you take responsibility from the
individual citizens and companies to the state, then you end up in another version of socialism
– which we proved that it is clearly unsustainable way of organizing the society. Now the monkey’s name is Julius. It wasn’t
famous in Slovakia at all, and now I can say people recognize Paul Frank which the feeling
is really good. Despite the fact that it can be hard even
nowadays, the world problems, the European problems, I dare say that there is nothing
better than democratic society and freedom. I am happy that I live now, and I didn’t live
before. After independence, Slovakia’s earliest ranking
on the Fraser Report was 81. By the year 2000, it had moved up just three places to 78. Then,
after its economic reforms, it had leapt to 35. Now to see the impact of an even greater leap
in economic freedom, we travel halfway around the world to the west coast of South America,
to the long, thin country of Chile. Despite its volatile political past, Chile is a stunning
example of what can happen when a country embraces economic freedom. In 1975, Chile
was next to last among all the countries ranked by the Fraser Report. Today, it is among the
world’s top 10 economically free countries…a ranking they have enjoyed since 2005. This idea was born as the result of our family’s
initiative to do something together to try to escape poverty. That’s how we created this company, this partnership
between brothers that started little by little. John Hernandez grew up in a small Chilean
village. He went to work on a beekeeping farm to learn the trade and after 5 years, he,
his 2 brothers and sister pooled their money to invest in their own beekeeping business. We walked into a business without knowing
what to expect from the future. They would concentrate on honey production
and pollination services for local farmers. Their business slowly began to grow and eventually
the bee farm could support their many growing families. Then, in 2005 there was a sudden decline in
bee populations, jeopardizing crop pollination around the world. Nearly one-third of human
food requires pollination from bees. Since then, the crisis has only worsened…with
one-half or more of the bee population dying. The bee health situation was very bad. So
we got serious about our professionalism. We were no longer peasant beekeepers that
we were at the beginning. We had to turn our company around and incorporate technology,
and to do that, we had to hire experts and bring them from abroad so we could be taught
how to save our bees. We trained ourselves and educated our workers. But maintaining the health of his bees was
not going to grow the business. John needed a new source of income. His research led him
to a large French bee producer in desperate need of new hives. John’s company began exporting
queen bees, and even full hives, to France. Since Chile has one of the most open trade
policies in South America, implementing this new source of income was not difficult. By producing queen bees for Europe, we generate
income in the months of April, May, and June… months traditionally with no income for us. John and his family had made a new life for
themselves and for others in their community. For his parents, such success would have been
unthinkable. One leader of Chile’s economic transformation
was Hernan Buchi. You have to look backwards and see how much
poverty there was some time ago in Chile. There was a perception then by people that
was convinced that the way out for a society was communism. In 1970, Chile elected a new president. Salvador
Allende was the candidate of both the Socialist and Communist Parties. Allende took immediate
and controversial steps to implement a centralized economic system fully controlled by the government. A strong percentage of the population legitimized
violence as a form of solving political differences. Allende was the founder of one of the organizations
for the promotion of revolution in Latin America, and the expansion of the economic activities
of the state were done not by law, not through parliament, but simply by taking over. They actually wanted to destroy the market
as a way of taking over politically, and then have the power. Because when you take the
market- then you have the power. Allende nationalized all businesses. He took
over farms larger than 200 acres, and sent armed militia to commandeer the mining companies,
as well as many small, family-owned stores. He greatly increased government social programs
to aid the poor. But the economy was in chaos, and his government could not fund the programs
they had created. In just one month inflation soared to 22%,
and in 1973, Chile’s Supreme Court unanimously denounced Allende’s actions as unconstitutional. In September of 1973, General of the Army
Augusto Pinochet led a coup d’état against the Allende government. As the army moved
in, Salvador Allende committed suicide. In less than a day, a military junta controlled
Chile, and Pinochet was proclaimed president. It is estimated that under his regime 3,000
people were killed, and another 25,000 were imprisoned or tortured, including women and
children. A dramatic monument to “The Disappeared” stands today to remind Chileans of that terrible
period. But there is a great paradox within Pinochet’s
rule. Many generals wanted the military to control the economy as well, but instead,
Pinochet invited outside experts to try and save the collapsing system. He handed over the restructuring of the country’s
economy to a group of young graduates of the University of Chicago, students influenced
by the Nobel laureate Milton Friedman. They became known as the “Chicago Boys.” The Chicago influence in Chile was relevant
because it created a new brand of economists… more modern trained economists. People that
believed in free markets and free society. That kind of things were a novelty at the
beginning of the ’70s in Latin America and in Chile. Chile implemented an open trade policy, returned
businesses to private ownership, and privatized the pension system. Although a difficult transition,
the economy began to improve, soon growing at an unprecedented rate, and the world took
notice. “Competitive imports mean Chilean manufacturers
have to raise productivity and quality or go to the wall. Statistics indicate that 130
Chilean businesses did go bankrupt in the first quarter of 1980. Businesses ranging
from large factories to small, neighborhood stores. But at the same time, there are indications
that industrial and agricultural production nationwide is slowly increasing. There is
no shortage of customers for the wide range of goods on sale at reasonable prices.” Although economic freedom had been achieved,
political freedom would not be realized until 1991. Pinochet finally authorized an election
– and was defeated. He stepped down, although the legacy of his brutality lives on. This economy is the only way in which the
poor can overcome their situation and that we have seen in Chile 100%. And you can have
social mobility – which in Chile didn’t exist. 3% of the population went to university. Today
we have nearly 40%. 75% is the first generation that’s going to university. To me, that’s
a much fairer country than the one that existed when I was little. Over the past three decades Chile has transformed
itself. Its poverty rate was then 40%. Today, it is 14%. Extreme poverty in Chile has dropped
from 16% to 3%. And now, there are several independent programs
designed to promote and support entrepreneurial activities among the poor. Veronica Cerezos
is a participant in one such program. My name is Veronica Cerezos and my micro-factory
is FIBRA DISEÑO Y HOGAR. We manufacture loom, weaved and felt objects. We make rugs, throws,
and cushions. And we are planning on making curtains and sheets in the future, all home
decor. Veronica and her family live below the poverty
line in Viña del Mar, in an encampment of simple homes. Electricity is unofficially
taken from the street, water comes from the community cisterns and there is no sewer system. We began training. And we were there for over
a year learning how to weave on a loom, to make felt, to sew, and select materials. Learning
how to manage a micro-factory. So far, we have made twenty-thousand pesos
we have saved. With that money, we will buy some wool to make a rug that was ordered. Today Veronica and her partners are moving
into their new workshop. We want to prove that even though we live
in an encampment, we can do it. We want to have more income, and at the same
time make our business grow, so we can employ our own people, all of those that live here
at the encampment. That is why we decided to do our workshop right here where we live. We have 3 children we have to send to school.
And we have to make efforts for their sake. We fight for them. I am giving them something
better than what my parents could give me. Beekeeper John Hernandez is also working hard
to create a better life for his family. He believes he can help America’s problem with
dying bees. But the United States has strict import regulations
that forbid the importation of bees from South America. They need bees. That’s what we’re working
for right now…negotiating that. In the meantime, he remains appreciative of
the business he has from Europe. Today’s situation is so different. For sure
a lot has changed in my life. For over 30 years the United States was around
3rd place. But in this latest report, the U.S. is at 19. Why, what happened? Well, the biggest single factor contributing
to the U.S. decline is the decline in the legal structure area and protection of property
rights. From the wars on drugs and terror- to the more widespread use of eminent domain
to take property from one party and transfer it to another, to the auto bailout, which
tended to undermine the property rights of bond holders. Well, generally the economic freedom index
is showing a rise in economic freedom around the world. And only a handful of countries
are decreasing. Some people object to economic freedom because
they think it’s just freedom for the well-off, for the big businesses and for those who already
have power. What’s your take on that? I think if you look at the U.S., in response
to kind of the financial crisis- what did we get? We got greater concentration in the
banking industry. It’s harder to be a local bank, local savings and loan. The banking
interests and banking lobbyists used the opportunity of the financial crisis to solidify their
position in the marketplace. That’s not economic freedom, right, that’s antithetical to economic
freedom. All those lobbyists that those corporations
hire and they send to the national capital. They’re not arguing for more economic freedom,
they’re arguing for less, they’re arguing for special privileges. Oppression of economic freedom, it’s kind
of subtle and it goes under the radar and fewer people notice it, and that’s what makes
it very difficult to defend. That’s the beautiful thing about this Economic
Freedom of the World Report. It makes these trends visible. It tells us where to look;
it gets us talking about it, and that’s why we do this. That’s why you do this, that’s why I write
about it, that’s why we talk about it. Guys, thank you so much for sharing your thoughts
and your work on this. Thank you. Thank you. In my years researching this topic, I’ve seen
example after example where people’s lives have improved for the better because they
had economic freedom. It may be the most powerful force I know for empowering people, and creating
conditions for poverty reduction and national prosperity. For Sylvia and Hector Banda, economic freedom
has sparked the creation of several innovative businesses resulting in new jobs and healthier
foods for thousands of their countrymen. For Dae Sung Kim it has presented the opportunity
to serve his fellow North Korean refugees who are building a new life in a new country. John Hernandez is contributing to the worldwide
fight against a declining bee population, while Katarina Ryberikova has embraced the
entrepreneurial spirit and brought prosperity to many others. And for Veronica Cerezos, economic freedom
has provided hope that life will be better for herself and her family. These people are the heroes of our time, working
hard to transform their lives and their communities. For them, economic freedom is not some academic
concept, or economic abstraction. It’s food on their tables. It’s a future for their children.
It’s the ability to enjoy the fruits of their labor. And ultimately, it’s the power that we all
desire…to control our own lives. Major Funding for this program was provided
by: Donald and Paula Smith Family Foundation Additional Funding was provided by David and Annette Jorgensen Foundation, and Chris and Melodie Rufer

1 thought on “Economic Freedom in Action: Changing Lives – Full Video

Leave a Reply

Your email address will not be published. Required fields are marked *