კონფერენცია

∘ Vakhtang Chkareuli ∘
THE OPTIMAL LEVEL OF ECONOMIC LIBERTY AND ITS IMPACT ON THE ECONOMIC DEVELOPMENT

Summary

Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion, so called the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals – the technique of the market place.

A common objection to totalitarian societies is that they regard the end as justifying the means. Liberals disagree with this statement and argue that appropriate means are free discussion and voluntary co-operation, which implies that any form of coercion is inappropriate.

Basically, individuals can be considered as economically free when a) property they acquire without the use of force, fraud or theft is protected from physical invasions by others, and b) they are free to use, exchange or give their property to another as their actions do not violate the identical rights of others.

Economic freedom is a fundamental right of every individual to control his/her own labor and property. In an economically free society, people are free to choose whether they want to work or not, produce, consume, invest etc. Institutions do not discriminate either or in favor of people to any factor unrelated to individual merit, government decision making is characterized by openness and transparency. The allocation of resources for production/consumption is based on the open competition so that every individual gets the chance to succeed.

It is important to distinguish economic freedom from political and civil liberties. Political liberty means that citizens are free to participate in the political processes, elections are fair and competitive and alternative parties are allowed to participate freely. Civil liberty encompasses the freedom of the press and the rights of individuals to assemble, hold alternative religious views, receive a fair trial and express their views without fear of physical retaliation.

When we are talking about what should be the role of government in the layout of economic freedom, first of all we have to sign that it must do something that the market cannot do for itself. Generally, state action or government control that interferes with individual autonomy limits economic freedom, but the goal is not simply an absence of government coercion. The government has its exclusive role to provide proper legal structure and a law-enforcement system that will protect the property rights of owners and enforce contracts in an evenhanded manner.

In this paper we will discuss the concept of economic freedom, what is the role of government to gain an optimal level of “freedom” and what is the possible impact of economic freedom on economic development.

Ivane Javakhishvili Tbilisi State University Paata Gugushvili Institute of Economics International Scientific C O N F E R E N C E S "ECONOMY – XXI CENTURY"

E ISSN 2587 - 4691	∘ Vakhtang Chkareuli ∘ THE OPTIMAL LEVEL OF ECONOMIC LIBERTY AND ITS IMPACT ON THE ECONOMIC DEVELOPMENT Summary Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion, so called the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals – the technique of the market place. A common objection to totalitarian societies is that they regard the end as justifying the means. Liberals disagree with this statement and argue that appropriate means are free discussion and voluntary co-operation, which implies that any form of coercion is inappropriate. Basically, individuals can be considered as economically free when a) property they acquire without the use of force, fraud or theft is protected from physical invasions by others, and b) they are free to use, exchange or give their property to another as their actions do not violate the identical rights of others. Economic freedom is a fundamental right of every individual to control his/her own labor and property. In an economically free society, people are free to choose whether they want to work or not, produce, consume, invest etc. Institutions do not discriminate either or in favor of people to any factor unrelated to individual merit, government decision making is characterized by openness and transparency. The allocation of resources for production/consumption is based on the open competition so that every individual gets the chance to succeed. It is important to distinguish economic freedom from political and civil liberties. Political liberty means that citizens are free to participate in the political processes, elections are fair and competitive and alternative parties are allowed to participate freely. Civil liberty encompasses the freedom of the press and the rights of individuals to assemble, hold alternative religious views, receive a fair trial and express their views without fear of physical retaliation. When we are talking about what should be the role of government in the layout of economic freedom, first of all we have to sign that it must do something that the market cannot do for itself. Generally, state action or government control that interferes with individual autonomy limits economic freedom, but the goal is not simply an absence of government coercion. The government has its exclusive role to provide proper legal structure and a law-enforcement system that will protect the property rights of owners and enforce contracts in an evenhanded manner. In this paper we will discuss the concept of economic freedom, what is the role of government to gain an optimal level of “freedom” and what is the possible impact of economic freedom on economic development.