Calvert Hall College High School
Towson Maryland
Teacher: Mr. Kropp
Shackles of Economies
By Ryan Kelly
11th grade
There is much diversity in the economic freedoms of many countries. The various philosophies of economic interaction can be compared in countries such as Ireland, Germany, Brazil, and Cuba. One major point that determines economic freedom is whether the country follows the tenets of capitalism or of socialism. The relative value of currency and the status of national debt have some affect on its economy. Focuses in the economy, whether on food, manufactured goods, or service industries, are important. Unemployment rates and average incomes indicate how much freedom individuals have to impact the economy. The benefits conferred to citizens, by the government, determine freedom and availability of jobs. As the freedoms in marketing, stability of currency, quality of work, and benefits from the government all increase, so does the economic standing of the country.
The economic philosophies of countries are the major factor in whether they have a free economy. In a socialist country, the government has total control over trade, allowing interactions with foreign countries only if this furthers the governments’ ends. Black markets and smugglers are the only form of free trade available in Cuba and these are hunted, since they are illegal. Cuba is one example, with 75% of workers in the government’s employ and maintaining control over foreign trade, to the extent of limiting which currencies are allowed into the country. Brazil is moving from this type of state, dominated trading, towards a more capitalistic economic style. Free trade is beginning to expand in Brazil, as the government supports the ideas of more privately owned and run businesses, although this change to capitalism has caused problems that limit options in foreign markets. Capitalistic countries are those that allow freedom in the business world and encourage competition. Even within capitalistic countries, however, there are some differences. Germany restricts the freedom of the market in some ways by providing subsidies. The government still controls some transport agencies, although these are becoming private as well. Ireland, on the other hand, has an almost completely free economy, with only some state influence in a few companies. The amount of direct state control is the largest determiner of economic freedom for those who live within a country’s boundaries.
The countries’ policies on managing money have a huge impact on the economic freedoms of its citizens. Cuba, which defaulted its international debt in 1986 and has gone into debt again, has little international credit and has problems getting money. These troubles are reflected in the way its citizens can trade, making those who trade deal with interest rates as high as 22%. Inflation creates a number of problems. Brazil and Ireland are good examples of the different ways governments handle inflation. Brazil had massive amounts of inflation in the past and was failing in attempts to control it, which was causing a downward trend in the economy. The Real Plan in Brazil eliminated inflation, causing massive improvements in purchasing power and economic transactions. Ireland has been controlling its inflation rate well, which is currently at 2.3%, but due to actions beyond its control, when the European Central Bank took control and switched to a euro, there have been a few problems recently, including and increased inflation rate. Germany has had some problems with debt as well, although its economy is successful and produces large numbers of exports. Citizens tend to have less trouble in the domestic and foreign markets if the country controls its inflation and debt, keeping its worldwide credit good.
The focus of a country’s economy tends to reflect in its success and the options of its people. Ireland has a strong focus on service and industry, with agriculture becoming less important. Germany and Brazil both have a immense amount of industrial production, which has sent more products to foreign nations in recent years. Cuba has experienced some economic growth from tourism, but has a very strong focus on its agriculture, particularly sugar. In general, the more industrialized countries tend to be more open to foreign markets, although this is not always the case. The focus of the economy does, however, drive what professions and businesses citizenry focus on, and how much money is usually in the country. Trends in economic growth and the focus of the economy can reveal what options citizens have.
The financial and job conditions of the workers can be assessed to determine how much economic freedom they posses. Germany’s major financial problem is its unemployment rates, which have recently reached 12.6%, though conditions are improving. An inflexible labor market and bureaucratic regulations keep workers from getting jobs, which severely hampers the German economy. In Cuba, lack of hard currency for many years meant that the dollar was necessary to gain any luxury item, because pesos, which Cubans were generally paid in, would only be accepted for basic necessities. Brazil’s problematic economy lacks funds for education, health facilities, and pensions, all of which Ireland is able to provide because of less restrictive and more successful economic policies. The freer work markets and greater benefits of some countries tend to lead to greater financial successes.
Countries have large variations of policy that affect how their citizens use their freedoms. The idea of a free or state controlled market determines whether there is economic freedom even at basic levels. The countries that have freer economies are those that eliminate problems or are at least begin to fix them. When a country pays its debts and offers services that its citizens need for better careers, fiscal success comes and its citizens gain more freedoms. Focuses in economic goals guide how citizens prepare for varying professions, and what options the government offers to help them. Countries that grant free markets and give their workers benefits tend to be successful, and with this success often comes more freedom. Responsible economic policy grants individuals freedom and the ability to succeed in business and financial interactions.