Posted: September 29, 2005

So much for the tax rhetoric!

Reuters reports this morning on the latest World Economic Forum's economic competitiveness index - see Report. Local reporting (via the ABC is on Australia's entry into the top 10 countries but the interesting part of the story is the composition of the top 10. The Country Rankings 2005-2006 are:

1. Finland
2. USA
3. Sweden
4. Denmark
5. Taiwan
6. Singapore
7. Iceland
8. Switzerland
9. Norway
10.Australia
11.Netherlands
12.Japan
13.United Kingdom
14.Canada
15.Germany
16. New Zealand

The most competitive country Finland has very high taxes and runs extensive social security systems. The other Scandinavian countries in the top 10 are similarly high taxing, big public sector countries with widespread welfare systems. Most are committed to full employment and their public sectors play a strong role in job creation and policies aimed at including their youth in the labour market.

Other highly regulated economies also dominate - Taiwan (4th), Singapore (5th), and Switzerland (8th). The WEF did not avoid the paradox of their findings relative to the whining rhetoric of the business lobbies and the free market economists. They said that the survey results reflected "hard economic data" and they noted that the north European nations "are challenging the conventional wisdom that high taxes and large safety nets undermine competitiveness ... [despite the business communities complaints] ... there is no evidence that these are adversely affecting the ability of these countries to compete effectively in world markets, or to provide ... some of the highest standards of living in the world."

So what do the free market economists say about that?

Blog entry posted by bill