(13-Apr-2011, 08:01 AM)Sajit Wrote: In light of the various scams and scandals in India, some people blame the 'capitalistic' system for increased corruption in society. But the data with Transparency International and Heritage Foundation show that countries with more economic freedom have less corrupt societies. Here is a chart. The red dot is India.
Im not buying either hypothesis.
Firstly, I'm definitely not buying the idea that the problem we are facing is because capitalism inherently leads to corruption. The default is that countries that have highly state-controlled governments are prone to just as much corruption as capitalist states, and I'd have to see data otherwise to be convinced this is not so.
But on the other hand, ideas such as economic freedom and capitalism are very often conveniently redefined and quantified in a biased way by organizations with an agenda. And the Heritage Foundation has an agenda. I've been following American politics for the past 7 years. Trust me, the Heritage foundation has an agenda. This is the same foundation that pushes the republican agenda, and works to elect republican presidents in the US. They are not for economic freedom the way Adam Smith envisioned the free market. They are for economic freedom the way it benefits them. For example, just ask them what their position is on outsourcing. You'll see how steadfast they are on economic freedom.
Before making up my mind on your question I would have to see the original study, and know how they determined the variables. But on its face I can say that they probably ignored inconvenient facts. For example, such organizations always fail to mention that Western Europe (and the west in general) has the highest amount of government programs and social security nets in the world- not very capitalist of them! The Scandinavian countries are practically socialist. The US has the largest federal budget in the world, with hundreds of billions of tax-payer dollars going into government control (through everything from subsidies to tax incentives and publics works contracts) of the economy. All of these are easy to bury under free-market language. The Heritage foundation will always make unregulated market models look good, because they are a conservative (American fiscal conservative) think tank. But let's not be completely cynical. Let's see the actual data, and lets find out how they defined economic freedom and other such concepts in the study. There was a study, right?
Here's a quote that is good to keep in mind when analyzing statistics from biased sources.
Quote:“An unsophisticated forecaster uses statistics as a drunken man uses lamp-posts — for support rather than illumination.”