Freedom of Economic - Article Example

Name Course Tutor Date Economic Freedom Economic freedom is the freedom to prosper without economic intervention from an economic authority such as the government. If such is true for a given region, then individuals who are responsible of private properties are secured and protected by the limited government in order to undertake economic transactions. Economic freedom is comprised of four strong pillars namely; rule of law, limited government, regulatory efficiency and open markets. Since these factors are linked directly or indirectly to individual prosperity they are discussed in various perspectives within this article in order to create further understanding of the superficial facts (Sandefur). One of the issues that is thought to affect individual development within the contemporary world is the relationship between rising taxes and employment. The government is usually responsible of raising taxes and at times such moves have been found to affect those in employment and/ employment prospects. The basic relationship between rising taxes and employment is inverse in that employment prospects nosedive when an economy imposes new taxes or raises the existing ones. The economic effect of such moves by the government in a bid to ensure a sustainable economy through national budgets meant to meet the conditions in which citizens can thrive can be extremely adverse. The major issue is that private investors definitely withdraw from economies that impose high taxes to other economies whose taxes are affordable. This leads to dimming of employment prospects and a cut in salaries of the existing employees. The government is therefore supposed to carry out due diligence when it comes to providing basic requirements for the success of private individuals by imposing taxes that are considered as optimum through thoroughly conducted researches and consultations. This government’s roles are also to guard individual rights of its citizen as may be contained in the constitution so as to maintain economic confidence towards prosperity. Apart from the fiscal policies, the government is also mandated to ensure that there is a sound monetary policy in place in order to combat shortcoming such as inflation and recession. Other than the government, there are other regulatory tools that are established by the people of a given economy in way of regulation. According to Beard (2012), the constitution offers effective economic decisions which exist within the limitations that are voted in by individuals. Such limitations govern the manner in which financial resources are allocated within a given economy. The constitution is also a law that offers normative advice to the rulers when it comes to determination of economic functions that are in line with economic distribution. Economic development is revolutionary and in such cases whereby individuals wish to transact in large scales, they are mandated by the constitution to form companies. Companies are governable entities which possess well laid business models that meet the requirements of the day. Governments provide companies with all the requirements in order for them to sustain the economy through provision of employment to upcoming individuals. A good example of this is provision of employment to engineers by engineering consultancies. Apart from providing developing human capital required for the growth of collective economy, companies are also entrepreneurs who are entrusted by the government to offer distributorship of services through constitutionally acceptable structures. Companies are given opportunities to optimise the economy in order to create projectable economic futures for prosperity (Jenkins). While contemporary governments have embraced capitalism economy in which individual investors directly benefit from the existing economic freedom, there are indeed others in which socialism is the order of the day. Socialism is described as an economic system in which property is collectively owned or controlled by state set cooperatives or organisations that seek to establish equality (Schumpeter). Social justice has set into institutions in that this form of social justice is used as an approach to redistribute student grades in what is referred to as fairness and equality. This approach in my opinion should not be utilised to sanitize student grades as it poses many disadvantages just like its socialism economy counterpart. One of the most adverse effect is that individualism is eliminated through bureaucracy and inefficiency. The artificial creation of grades is not allowable since it deprives individual accountability or even leads to wastage of efforts put by some students who toil to achieve what they require. Devastation and psychological affects the hard workers in the name of equality when this is virtually impossible. Competition is also reduced to almost nil by such move creating a pool of dependent individuals later when it comes to facing real life situations. Where it comes to modulated grades, the employer confidence is diminished as close watch over such individuals shall definitely be required from time to time (Farooq). In a social move meant to redistribute property, individuals are imposed to taxes according to their earnings. Taxes have been observed to rise from low earning citizens to those who earn highly, in a move to ratify socialism. Increasing taxes paid by engineering employees is not only devastating but also a demeaning idea owing to the economic contributions made. Apart from this fact, the kind of hardships that engineers undergo should be compensated by the government instead of taxing them further in a non-justifiable move meant to fend for special groups. Michael (2011) states that while the government may seek to impose higher taxes on high earning professions, this situation cannot be analysed in a static environment. The economic ideals therefore indicate that increasing taxes is likely to cause behaviour alterations in a bid to minimize tax burdens (Michael). A country is likely to move from poor to poorer in such scenarios whereby individuals are exposed to fairness and equality all in the name of economic socialism. Economic freedom under positive capitalism is proven as the best regulating type of economy in which individuals thrive to fend for themselves as opposed to government initiative in providing luxuries to them. The government through taxes is mandated by voters to provide basic needs and the required infrastructure in order to ensure that the economy thrives above all. Embracing equality and fairness is a fad since nature’s law of natural selection supersedes social justice. Individuals bred in such environments may naturally find a comfort zone in which if not regulated makes them embrace laziness and poor economic decisions. Social justice therefore discourages entrepreneurship at the expense of economic growth. Voters who do not pay taxes should not be allowed partake in referendums meant to vote income rise for special groups. Milton Friedman is quoted as saying that “Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own.” Adam Smith was also keen to observe that “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” Therefore a man is likely to take better care of himself in a situation where he is making money for himself and the family other than when he is making it for redistribution to others who are not working as hard as he is (Hawkins). Over years, engineering jobs have been observed to migrate to low cost economies with the leading country being China. This concept also referred to as outsourcing has seen delegation of tasks to external agencies in a bid to benefit from low cost of labour among others. In a free economy world, investors are encourage to make drastic moves to ensure that they remain relevant or be wiped away by their competition. This is a business competitive edge that has been observed to offer engineering with an ability to concentrate on tasks that are critical to their growth and their respective economies at large. Apart from freeing resources, this enhances risk mitigation, expansion and gaining worldwide accreditation (Hale). Works Cited Beard, Charles A. An Economic Interpretation of the Constitution of the United States. Mineola, New York: Courier Dover Publications, 2012. Book. Farooq, Umar. What is socialism, advantages and disadvantages of socialism. 21 December 2012. http://www.studylecturenotes.com/management-sciences/economics/243-what-is-socialism-mba-economics-notes. 15 October 2014. Hale, Judith. Outsourcing Training and Development: Factors for Success. Hoboken, New Jersey: John Wiley & Sons, 2006. Book. Hawkins, John. 7 Reasons Socialism Will Make You Poorer Than Capitalism. 4 December 2012. Web. 16 October 2014. Jenkins, Beth. "Expanding economic opportunities: The role of large firms." Economic Opportunities Series (2007): pp. 1-48. Electronic. Michael, Geoffrey. How Taxes Affect The Economy. 28 December 2011. http://www.investopedia.com/financial-edge/1211/how-taxes-affect-the-economy.aspx. 15 October 2014. Sandefur, Timothy . The Right to Earn a Living: Economic Freedom and the Law. Washington, DC.: Cato Institute, 2010. Book. Schumpeter, Joseph A. Capitalism, Socialism and Democracy. Routledge, 2013. Read More