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Free to Choose- -Linking Liberties: Economics, Politics and Religion

Presentation live on Radio Free Europe
Prague, The Czech Republic
September 28, 2009

Freedom of religion and economies actually go together, like—well you fill in the blank. One is not possible without the other because they emanate from the same source. They not only gravitate in a similar and related direction but they originate from the same basic truths. As two sides of the same coin we are finding in the 21st century a new fact: nations and economies that witness religious liberty have greater economic freedom and the opposite, namely, countries with the most economic freedom also engender more religious liberty and democracy. The reason for this can be summed up in a single word, and that word is, competition.

Freedom of religion in the Western tradition and evidenced in Western nation-states is generally considered to be a fundamental right. As such, it is underscored by a guarantee of respective sovereign governments to allow the freedom of belief for individuals, including women and children, as well as the freedom of worship for all persons and groups. Logically, freedom of religion also includes the freedom not to follow any religion at all.

In the 1948 Universal Declaration of Human Right freedom of religion is defined as “Everyone, including women and children, have the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief, and freedom, either alone or in community with others and in public or private, to manifest his religion or belief in teaching, practice, worship, and observance.”

This definition makes it abundantly clear that freedom of religion is a legal concept related but not completely identical with toleration, diversity, or the separation of church and state. Indeed, throughout history even for states that allowed for freedom of religion that theoretical freedom was often abrogated or limited and included such acts as punitive taxation, repressive social legislation, or even political disenfranchisement.

In the last three decades the concept of economic freedom has grown out of the writings of notable, mosly neo-classical econmists. The agreed cornerstones of economic freedom are: personal choice rather than collective action; voluntary exchange coordinated by markets rather than allocation via the political process; freedom to enter and compete in markets; and protection of persons and their property from aggression or harm by others.

While there is much debate on which precise policies promote economic freedom most, there is more or less agreement that the size, expenditures, and taxes of government, and the right to enterprise formation along with the legal structure and security of property rights are most essential to its flourishing. Access to sound money and transparent capital markets, freedom to trade internationally and minimal regulation of credit, labor, and business, also count a great deal.

The nation-states / economies with the most economic freedom, witness individuals that are free to work, produce, consume, and invest in the way they please, and their freedom is both protected by the state and unconstrained by it. In locations of economic freedom which can be measured and scaled, there are free public and private companies, in other words, enterprises that flourish as a result of the protection of both the rule of law and enforced codes of business. Business law and capital market access are twin pillars that allow entrepreneurs the freedom to start businesses, merge businesses and sell businesses in freedom and without political interference or undue regulation.

Now the question must be broached because the data assebled is obvious for all to see: Why do those countries with the greatest degree of religious liberty also exhibit the greatest measure of economic freedom? Further still, those same places give rise to and apparently encourage entrepreneurs who benefit themselves, their companies, employees, shareholders, consumers, stakeholders and the entire community by growing enterprises as engines of development from which all benefit.

Why, we must ask is this the case; and why are we so blinded to acknowledge these facts? The corollary, namely that religious liberty begets economic freedom is now provable. If we desire more economic freedom we need to begin by insuring religious liberty. If you want economic growth and development we need to tolerate and permit religious groups and persons to do as they chose. Competition for religious activity is as healthy as for economic activity. Those states that fail to allow economic freedom are universally those that do not permit religious liberty. And likewise, those that fail to encourage religious liberty often, almost always it turns out, fail to give rise to economies of prosperity with economic freedom. Some countries may have mineral or other wealth or large productive workforces but they cannot sustain their economic growth. Why? It circles back to the link between religious and economic freedom.
spiritual capital is in a sense is the missing link. Lord Keynes, it is said, once remarked that for centuries we had kept religion and business in “different compartments of the soul”. By breaking those divisions apart and seeing their connection we overcome one of the dilemmas of modernity. For economic growth to take place, capital is necessary. Money buys tools, pays labor, and builds infrastructure. Obviously, to this is added human capital, mostly in the form of education and personal betterment. But for countries / economies to make efficient use of their reserves, spiritual capital is also required.

Like all forms of capital its formation depends on delayed gratification, why else have capital. Future benefit is thereby weighed against immediate consumption. In the same way money capital accumulates in savings accounts and investments, so too spiritual capital is built up, over time through habits of the heart and realized in mediating structures, such as families, churches and religious institutions, social groups, schools and in the wider culture. In that sense, when critics complain about the lack or unequal distribution of capital in the modern world they too often forget that spiritual capital is as imporant as other forms of capital to restore communities or build nations. Here ia a truism that has become more apparent as secularization theories and modernization models have fallen by the wayside or been overcome or contradicted by factual reality: freedom and responsibilty lead to capital formation. Sense of purpose, moral purpose, primarily established by and in religious freedom gives rise to economic freedom and the formation of every kind of capital.

In the West an understanding of natural law has evolved from Aristotle’s notion of private property to Grotius, on to Locke’s trinity of life, liberty and estates, to the Scottish Enlgthenment’s described moral sense tied to benevolence and self-love and the right to contract with others. In Smith, the desire to engage in mutually beneficial voluntary exchange of private property is viewed as an innate propensity of man. Modern commerce in that sense then grew out of this rich religious tradition and is sustained by it in a spirit and morality of democratic capitalism. In the 21st century the abiding question may well be for an integrated global economy and a world of increasingly democratic political systems: does your religious liberty match your economic freedom and vice versa? If not, why not? And if so, how so? Closed religious systems foul economic development and stunt growth. Closed economic systems are unkind or worse to religious sentiments and practice. You need both to sustain human flourishing.

The analysis of this set of new comprehensive data demonstrates that the countries with the least religious liberty also suffer the worst economic freedoms and are lacking in political rights. Who are they? Let’s name names: Burma, China-Tibet, Eritrea, Iran, Iraq, Maldives, North Korea, Saudi Arabia, Sudan, Turkmenistan, and Uzbekistan come in as the worst of the worst. But following not far behind are: Afghanistan, Bangladesh, Belarus, China, Cuba, Mauritania, Pakistan, Palestine, and Vietnam. For country specifics read the national surveys in greater detail in our book, Religious Freedom Around the World published in 2008.

When you look at religious freedom and economic freedom in comparison to civil liberties ratings a number of countries pop out as especially problematic and include: Bangladesh, India, Maldives, Serbia, and Turkey. When compared to overall religious libery ratings, another country sticks out as far worse, Kosovo.
So what are the implications, then?

  • For companies? Corporations, small or large, national, multinational or digital exist and operate on the basis of trust. Contracts are honored, relationships continued and sales increased only to the extent any given company lives up to its word and on the basis of its earned reputation. Companies must therefore more than any other actor in society uphold economic freedom and see that it is linked to religious liberty. They should do business only and to the extent that it opens up economies and insures religious freedoms. Businesses need to step forward with moral courage and say to these worst regimes, change your ways or we will not do business here. They would not accept these practices or prejudices at home or internally, so they should muster the courage to say something is wrong and back it up with words, muscle and hard cash. They should be willing to do this alone, in groups or as blocs, coordinating and announcing efforts to bring about good.

  • For governments? Governments who have made religious liberty and economic freedom a priority, and there are an increasing number of them across the whole world not only in the developed countries, need to establish a policy in foreign policy called linkage. This same policy has worked in the past against the Soviet Union and South Africa. The stakes are the same and the effect could prove remarkable. Bilaterally and regionally countires need to speak, back-up and enforce their words with real policy, investment, trade flows and development assistance based on hard criterion. Too much of the effort here has been humanitarian work, which is surely good but what is needed is foreign policy not some stand afar office to take care of complaints or rescue individuals. A pact among collaborative countires rooted in such convictions makes infinite sense. Multilaterally this linkage should move front and center in the United Nations, the Human Rights Commission discussions and in every nook and cranny of foreign policy. It should be on the agenda of the G-8 and at summits wherever they take place.

  • For the international financial institutions? For too long the IFIs, namely the World Bank Group, the International Monetary Fund and the regional development banks have ignored both economic freedom and religious liberty. Rarely, if ever have they linked them. They neither study the cultures they operate in or the religious faith traditions of their clients and members. That should change. Loans should be made on the condition of certain standards of both economic freedom and religious liberty. If the standards are not met then the countires will suffer until they change or amend their ways. The World Bank should establish a unit not only on corruption but on this critical linkage in its research department and then operationalize the results. Donor countries should insist on high standards or pull back on their commitments.

  • For capital markets? The integrated global capital markets are increasingly sophisticated and driven by economic performance. Sovereign debt is big business. Banks should make loans based on factors that include religious liberty and economic freedom and the ratings should gage such rankings. The world’s capital markets should be closed off to countries that do not meet minimum standards. At the least they should be forced to pay premimums. Money talks and this is one means of forcing change.

  • For trading regimes? The World Trade Organization and other trading bodies of a regional or bilateral nature need to more adequately reflect religious liberty and economic freedom and link the two. Trading with countries that do not respect human rights, either in the religion or economic spheres should have penalties attached. Fines, tariffs, or even economic sanctions should be considered and enforced in order to sway public opinion and to ultimately change behavior.

  • For civil societies around the world? In the past few decades the emergence and significance of civil society in the form of mediating structures located between the individual and the State have come to the fore. Without these little platoons there would be no structure for freedom, no civil rights, no advancement or progress in humanity. Nongovernmental institutions and organizations must be allowed and permitted to thrive. The encouragement of this sector and the role it plays in society needs to be more appreciated and highly valued. It is a bulwark against tyranny and injustice. It should also be a force for religious liberty and economic freedom. As such it should be favored and fanned, financed and bolstered but it must in turn do the same for religious liberty for people everywhere and for the benefits of an open economy.

  • Trade not aid is the real engine of enterprise. Interdedendency trumps dependency everyday, everywhere. Countries or economies that dwell in the never-ending cycle of poverty are often those with the least freedom of religion or economy. As totalitarian regimes or kleptocracies, they are too often either cults of personality built around the leader of the opportune moment, or a defunct ideology. Some are desparate places that still exhibit tribalism and iternacine warfare, or have come to live like welfare queens – off the fat of the state, which in this case turns out to be the aid system of guilt-ridden developed countries, who are quick to give aid but slow to build or invest. These regimes remain stuck, mirred in the past with no where to go and no way to break free, unless they step – out into the risky zone of freedom. If they start with religious liberty they will also get a degree of economic freedom. And if they commence changes in their economic freedoms, they will soon give rise to religious demands for liberty. The mistake is trying to separate things which are forever joined, that naturally go together. Linking religious liberty, politics and economic freedom to form enterprises of lasting value is the clarion call of humane people and enlightened nations today, in every country, every region, and on every continent.

Dr. Theodore Roosevelt Malloch, Founder and Chairman, Spiritual Enterprise Institute

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