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Former Estonian Prime Minister Mart Laar Wins Friedman Prize for Liberty
From Cato.org:
The Cato Institute today announced that the recipient of the 2006 Milton Friedman Prize for Advancing Liberty is Mart Laar, the former prime minister of Estonia and main architect of his country's remarkable economic transformation into one of the world's freest and most dynamic economies.

The prize and its accompanying $500,000 cash award will be presented to Laar on May 18 at the Drake Hotel in Chicago. Named after Nobel laureate Milton Friedman, the prize is awarded every other year to an individual who has made a significant contribution to advancing human freedom. The Friedman Prize went to the late British economist Peter Bauer in 2002 and to the Peruvian economist Hernando de Soto in 2004.

Upon hearing that he had been chosen as the third recipient of the prize, Laar said: "I am very happy and proud to receive such an important prize. The Milton Friedman Prize is especially important to me as I am such an admirer of Milton Freidman's works and I am proud that we succeeded to prove in Estonia that Milton Friedman's ideas really work. This is not a prize for me but to all my fellow Estonians, who have made the Estonian miracle possible."

Throughout his public life, Laar has embodied the values of liberty and free choice recognized by the prize, and his dedication to these ideals helped him to lead his country to economic prosperity through a radical free market program.

Today, Estonia is hailed as a model for emerging democracies and is cited as an example that ailing Western European economies should follow too. Consistently near the top of the Economic Freedom of the World Index, Estonia is now a member of NATO, the EU and the WTO, with well over 90 percent of its formerly state-run economy privatized.

When Laar took the reins of power of the newly independent country in 1992, he was only 32 years old, and Estonia was struggling to heal from the wounds of Soviet occupation. Laar believed that the way to ensure success for Estonia was to cultivate freedom and self-determination. In only two years in office, he negotiated the withdrawal of Russian troops from Estonian soil and introduced the kroon, one of Eastern Europe's most stable currencies. He also instituted a flat tax rate, a move, which has been widely copied . even in Russia. Under Laar, Estonia removed price controls, discounted useless regulations, and saw the largest real per capita income of any of the former Communist states.

But as Laar, who served two terms as prime minister, has pointed out, he is not an economist: "I had read only one book on economics . Milton Friedman's Free to Choose. I was so ignorant at the time that I thought that what Friedman wrote about the benefits of privatization, the flat tax and the abolition of all customs rights, was the result of economic reforms that had been put into practice in the West. It seemed common sense to me and, as I thought it had already been done everywhere, I simply introduced it in Estonia, despite warnings from Estonian economists that it could not be done. They said it was as impossible as walking on water. We did it: we just walked on the water because we did not know that it was impossible."

"Mart Laar, who was inspired by Milton Friedman, is the perfect Friedman Prize winner," said Ed Crane, president and CEO of the Cato Institute. "His courageous program as Estonia's prime minister created the 'Baltic Tiger,' a free and prosperous nation that is a model for the world to emulate. Laar's selection again underscores the international nature of the Milton Friedman Prize for Advancing Liberty."

In 2001, Friedman agreed to lend his name to the award. He said in a statement about the award: "Those of us who were fortunate enough to live and be raised in a reasonably free society tend to underestimate the importance of freedom. We tend to take it for granted. It has made us in the West more complacent, so having a prize emphasizing liberty is extremely important."
Dr. Weevil (mail) (www):
"They said it was as impossible as walking on water. We did it: we just walked on the water because we did not know that it was impossible." That part reminds me of Hilaire Belloc's description of the Water Beetle, W in A Moral Alphabet:

He flabbergasts the human race
By gliding on the water's face
With ease, celerity, and grace.
But if he ever stopped to think
Of how he did it, he would sink.
4.20.2006 11:10am
Swimmy:
And it reminds me of the classic movie Being There.
4.20.2006 11:31am
Trade Monkey (mail) (www):
Kudos to Mr. Laar!

This is an recognition that is well earned.

Perhaps Estonia's success can teach other 'advanced' nations the value inherent in the concept of personal liberty.
4.20.2006 11:41am
Gordo:
The economic news from Estonia is good, but this development is dwarfed in the freedom department by the astounding and miraculous events of 1988-91 that freed this country from a far more oppressive tyranny that that of statist economics.
4.20.2006 12:00pm
Dr. Weevil (mail) (www):
I forgot to mention the moral of Belloc's poem: "Don't ask questions!"
4.20.2006 12:12pm
Adam (mail):
An excellent choice. The whole world should learn from Estonia.
4.20.2006 12:52pm
Vovan:

An excellent choice. The whole world should learn from Estonia.


Antisemitism

107. There are currently approximately 3,000 Jews in Estonia. Although there is no institutionalized antisemitism in Estonia and the 27th of January has, since 2003, been commemorated as the Holocaust Memorial Day, ECRI notes that the manner in which the Holocaust and the Second Wold War is viewed tends to minimize the gravity of this period in history. Representatives of the Jewish community have thus informed ECRI that many Estonians view the Nazi occupation in a more positive light than the Soviet occupation. In this regard, a new Law on the Memory of the Victims of the Holocaust, Deportation and Other Victims of Crimes against Humanity was adopted in 2003. Whilst welcoming the adoption of this Law, ECRI hopes that it will provide an opportunity for people in Estonia to better understand the seriousness and full horror of the Holocaust.

108. ECRI has been informed that in August 2004, a monument commemorating Estonians who fought alongside the Waffen SS was unveiled in Lihula (in the Western part of the country). Although the Government removed it soon thereafter, ECRI notes there were demonstrations in favour of keeping this monument in place. Moreover, ECRI also notes that on 2 March 2005, a former soldier in the Estonian SS legion who was protesting against the decision to remove the monument in Lihula wrote an incendiary article in a newspaper published by the Centrist Party in Estonia, in breach of Article 151 of the Criminal Code. ECRI has no information on whether this person has been or will be prosecuted. It therefore hopes that the authorities will duly punish any such acts in order to send a clear message that they are unacceptable.


Heh
4.20.2006 1:19pm
Falafalafocus (mail):
Vovan,
I'm having trouble figuring out the purpose of the above post. As a preliminary matter, I fail to see the antisemitism in either example. Estonia has been recently under both Nazi and Soviet rule. The Nazi regime in Estonia was relatively brief in comparison to that of the Soviets. It isn't terribly surprising people who suffer under the yoke of one oppresser view prior regimes as freer than they actually were. In addition, every nation needs heros and most of those national heros, for better or worse, come from military moments. The SS was an abhorent organization and I ordinarily would be the first to line up in protest. But according to your citation, the monument isn't about the amazing SS and their incredible Jew Killing Machine. Instead, the monument pays tribute those who stood with the SS in defense of Estonia. As I mentioned before, for better or worse, Estonia has (and should have) an entirely different perspective on World War II and the Cold War than those of us sitting here in the States.
At any rate, even if these two incidents somehow proved that Estonia is a place that permits people to run around wearing Nazi armbands, isn't that called freedom of speech? I thought the Friedman Prize was all about promoting liberty. Can't we all agree that a land where all viewpoints are heard is freer and contains more liberty than one where it isn't? If Vovan's insinuation is true, then doesn't that provide just one more example of the freedom that Estonia now enjoys (especially given its statist past)?
4.20.2006 2:07pm
Michael Gordon (mail):
If Mart Laar believed that these economic ideals have already been embraced in the West, and he has shown that it works in Estonia, is it possible that we can have some of these economic reforms? Any chance of privatizing the post office?
4.20.2006 3:15pm
Vovan:
Falafalafocus

I'm having trouble figuring out the purpose of the above post. As a preliminary matter, I fail to see the antisemitism in either example

Considering more than half of my family died in the holocaust and in the war, I somehow fail to see the erection of the monument honoring soldiers that were not only fighting alongside the Nazi regime, but also include war criminals, as an example of the shining beacon of freedom. Furhtermore, the continuing policies of "economic progress" at the expense of the 27% of population, also strike me as somewhat dubious achievements. But hey, of course to you it might be more examples of freedom for the Esonians - well at least those who possessed Estonian citizenship before 1940. Those human rights sure are overrated nowadays.
4.20.2006 3:51pm
Falafalafocus (mail):
Vovan,

Considering more than half of my family died in the holocaust and in the war, I somehow fail to see the erection of the monument honoring soldiers that were not only fighting alongside the Nazi regime, but also include war criminals, as an example of the shining beacon of freedom.

My heartfelt condolences to your loss. I lost all but four members of my family from the Holocaust as well. But this isn't about how many people each of us lost to Hitler's hate machine. This is about whether the posting of the statute which you argue displays virulent anti-semites means that Estonia (and by inference Mart Laar) is less free than it was before Laar took office.
As I said previously, I don't agree with the initial decision to put up the monument. At best, it is in bad taste and displays a significant indifference to the evils of the men displayed. However, I am not Estonian. The initial reaction by the Estonians, according to the citations you provided, was that this was a memorial to war heroes.
Your response, at its core, suggests that incidents like the monument suggest an indifference to hatred and a lack of tolerance. First, the monument came down. The indicates at least some level of concern for minority views. Second, whether you or I particularly like the Estonian government's "head in the sand or worse" approach to evil is beside the point. You pointed out that when the monument was removed, there were:

demonstrations in favour of keeping this monument in place

Isn't that exactly what freedom is? If you and I don't like the ultimate decision by the Estonian people, we have every right to send letters, petition our own government to change its policies, etc. Whether we like it or not, liberty means that the Estonians have the right to do the same thing. In sum, liberty isn't liberty if you won't defend someone's right to support bad things.
As a rebuttal, you now cite an article which says that the Roma community is still discriminated against in employment and education. I can't really argue against the truth of those statements because I really haven't researched the issue. Assuming that this is true, how does this support the idea that Estonia is less free or robust than it was prior to Laar? Estonia has a long way to go before perfect liberty is reached. News flash: so does America. But Estonia moved pretty far, pretty fast, in the area of liberty. And isn't that the whole idea of the award in the first place? Dubious achievment indeed.
4.20.2006 4:26pm
Vovan:
Falafalafocus

Assuming that this is true, how does this support the idea that Estonia is less free or robust than it was prior to Laar? Estonia has a long way to go before perfect liberty is reached. News flash: so does America. But Estonia moved pretty far, pretty fast, in the area of liberty. And isn't that the whole idea of the award in the first place? Dubious achievment indeed.


I agree with you, but my purpose was to highlight some of the means used by the Estonian government both to achieve desirable economic policies, and promote national pride - the monument still stands - even though it is on private land, and other concerns have not been addressed.

Clearly Estonia is one of the more advanced countries in from the former Eastern Block, in a large part due to the Mart Laar, however, the European Community generally closes its eyes at the behavior of Baltic states, and while Estonia undoubtedly belongs in the European Union, more scrutiny towards it would go a long way in promoting economic and political freedom for some without abridging it for others - but I guess you cannot blame Laar for that.
4.20.2006 4:52pm
efalken:
The Roma are at the bottom of the socioeconomic ladder in Estonia, as they are in most (all?) countries they occupy. It is comforting to think this is primarily due to racist discrimination and persecution, bt I think they mainly have themselves to blame.
4.20.2006 5:53pm
David M. Nieporent (www):
I agree with you, but my purpose was to highlight some of the means used by the Estonian government both to achieve desirable economic policies, and promote national pride - the monument still stands - even though it is on private land, and other concerns have not been addressed.
But you didn't highlight "means used by the Estonian government to achieve desirable economic policies." You highlighted an article that said that there was discrimination against ethnic minorities. First, the article seemed to conflate public and private discrimination, and second, this discrimination is not "means used to achieve desirable economic policies."

The first article you cited complained that someone wasn't prosecuted for free speech. That's hardly supportive of your point that Estonia isn't free. That sounds like the Council of Europe is complaining that Estonia is too free.

And while I lost plenty of family members to the Holocaust also, and I'd be happy to see former war criminals drawn and quartered before being tossed into a vat of boiling oil, the fact that the Simon Wiesenthal center thinks that Estonia isn't pursuing 90-year old people vigorously enough for actions of 60 years ago doesn't exactly seem like a damning indictment to me of the country's freedom.
4.20.2006 5:53pm
Vovan:
David,

Someone mentioned that all countries should become more like Estonia. I pointed out some unsavory (TO ME) particulars of of Estonian society, such as the Nazi memorial, and the economic/political discrimination against the ethnic Russians.

If you find that aformentioned things do not diminish the positive results of Estonian developement - power to you, we'll then just agree to disagree
4.20.2006 7:46pm
Alan K. Henderson (mail) (www):
I am intrigued by this tidbit from the Index of Economic Freedom's report on Estonia:
According to the World Trade Organization and the U.S. Trade Representative, the EU imposes non-tariff trade barriers through a complex regulatory system and export subsidies. Based on its adoption of EU trade policies, and on the revised trade factor methodology, Estonia's trade policy score is 1 point worse this year.

Not a ringing endorsement for European Union membership.
4.20.2006 9:54pm
Dr. Weevil (mail) (www):
Does Estonia have no monuments to the Red Army? I have heard that they have more than one. How do the survivors of the tens of thousands of Estonians murdered by Stalin and other Soviet leaders feel when they see them? Vovan's concern for the sensibilities of Estonians whose loved ones were murdered seems rather one-sided.
4.21.2006 1:30am
Vovan:
You have heard right, there is a few and here is one of them, but once the 30% of the population leave or be forced out, it will be removed too.
4.21.2006 3:06am
Freder Frederson (mail):
It is comforting to think this is primarily due to racist discrimination and persecution, bt I think they mainly have themselves to blame.

And why is that, because they are lazy, shiftless, grifters who kidnap children and "gyp" people? Gee, isn't that what Hitler said about the Jews, and oh, yeah, the Gypsies (Roma).
4.21.2006 9:32am
Freder Frederson (mail):
Hey, did you guys bother to find out what Estonia's vaunted flat tax rate is? It's 24%! If someone proposed that for this country. it would throw you all into coniptions. And government spending is 37.7% of GDP (almost double that of the U.S.) and rising. This is according to Alan K. Henderson's link.

So apparently all you have to do is impose a "flat tax" and the libertarians just fall all over themselves in adoration.
4.21.2006 9:54am
Estonian:
The current rate is actually 23% (starting from January 1, 2006). According to a statute currently in force, it will be 22% next year, and will go down to 20% by January 1, 2009. The law could of course be changed before that. BTW, the party of the prime minister (thus, quite a strong player in Estonian politics) just this week announced that their campaign during the next elections will be based on a proposal to lower the income tax rate to 12% by 2015...
4.21.2006 11:33am
Estonian:
Forgot to mention that the current prime minister's party is different from Mart Laar's party. In fact, the current PM party is far more market-oriented in their economic policies than Laar's party (which is currently in opposition).
4.21.2006 11:35am
Estonian:
One more comment, regarding the article itself. There are some inaccuracies; Laar has been credited with things he actually did not do.

He did not negotiate the withdrawal of Russian troops from Estonia, he actually got stuck with the negotiations. The agreement was signed by the late president Meri (who was strongly accused by Laar's party for doing this, because the agreement included some guarantees for retired Russian military servicepeople).

He did not introduce the Estonian currency (kroon). Kroon was in place by summer of 1992; Laar became the PM in late autumn of 1992.

He is not the person to be credited with abolishing price regulations, either. Prices were pretty much free before he took office.

However, he did initiate many economic reforms and he deserves credit for that.
4.21.2006 11:50am
Freder Frederson (mail):
Simon Wiesenthal center thinks that Estonia isn't pursuing 90-year old people vigorously enough for actions of 60 years ago doesn't exactly seem like a damning indictment to me of the country's freedom.

Hmm, and it seems it was just like yesterday that Eugene was saying good Americans would never give apoligists for the Nazis a pass like certain people give traitorous apologists for Stalin like Pete Seeger a pass.

What delicious irony.
4.21.2006 12:07pm
Freder Frederson (mail):
Or in other words Nazis that kill Communists are cool (even if some Jews and gypsies get caught in the crossfire), but all the other Nazis are bad.
4.21.2006 12:25pm
Ken Arromdee (mail):
The first article you cited complained that someone wasn't prosecuted for free speech.

I think the point here isn't that it's wrong to allow these views to be spoken, but the fact that the views are held at all. If the same people held those views but didn't speak them, it would be as bad, it would just be harder for us to know about it.
4.21.2006 12:30pm
Alan K. Henderson (mail) (www):
There are two ways that taxation is oppressive: being too high, and being too complex. Labyrinthine income tax regualtions are the result of targeted tax cuts and targeted tax levies - that is, engineering the tax code to serve as a means of bribing the favored classes and punishing the less favored. High taxes makes the cost of living too expensive; complex taxes artificially inflate the number of issues citizens face when making economic decisions.

Estonia's flat tax solves half of the problem, and evidently remedies against the other half are being gradually introduced.

(BTW, the income tax rate is only a portion of any country's overall rate of taxation.)
4.21.2006 5:27pm
Estonian:
Estonia is actually quite well known for the non-complex tax regulations (there must be plenty of articles out there regarding this). And the tax return filing process is also made really easy. This year, 84% of the people filed their income taxes online. A very very large proportion of those people (there is no data readily available, but I suspect that the number is above 95%) did not have to enter a single number in their electronic filing form. The Estonian tax authorities simply pre-prepare the forms with information that they have collected. Then the person opens it on the internet, and after a few clicks the form is filed. This is actually a step ahead of what was suggested in a recent New York Times op-ed article ("Why Tell the I.R.S. What It Already Knows?" by Austan Goolsbee, April 7, 2006; suggesting that IRS should print the form out and send it to people who would sign it). And, more than 90% of the people who filed their taxes electronically and were entitled to some refund, received their refund within five days of filing (transferred to their bank account).
4.21.2006 6:27pm