Economic Freedom – 4th in the world
According to the Heritage foundations 2008 Index of Economic Freedom Australia is the fourth most free economy in the world coming in behind Hong Kong, Singapore and Ireland. The Heritage foundation is a US based think tank and it’s annual ranking of economies is based on a weighted assessment of things such as inflation, government spending, property rights and other such factors. The factors on which Australia seems to have done worst is in the area of taxation and spending.
What this ranking says about the state of economic freedom in the world as a whole is up for discussion.
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I often use the Heritage Foundation’s rankings to point out to what I would call “libertarian fundamentalists” that among developed wealthy nations, economic freedom varies considerably, but not actual total wealth.
Where economic freedom makes a huge difference is among poorer, developing nations. In other words, it’s vital for getting out of poverty, but not necessarily for maintaining wealth.
One other point – how on earth does Singapore get an 87% freedom ranking when it’s essentially a dictatorship, with a very heavily regulated banking sector to boot?
Being a dictatorship is not really relevant in deciding economic freedom. Singapore would not rank so highly on measures of civil liberties or political freedom. However the index is focused on economic freedom.
I disagree that you can separate the two. Although I will admit that in many ways political freedom interferes with economic freedom (e.g., without democracy we wouldn’t have pork-barrelling). But at least with a democracy, economists have multiple avenues to pursue to convince governments of the benefits of economic liberalisation.
Singapore is an authoritarian democracy but I would not call it a dictatorship as such. I know a Singaporean who hates the lack of freedom there but even he said he voted for the current ruling party. The fact is that the ruling party does actually win the votes it gets because the vast majority of people don’t think the others will be as competent and sadly this seems to be true. It can be argued that the opposition would win marginally more seats if the ruling party lifted all sorts of restrictions on political speech but they would still win hands down.
“Sadly this seems to be true” – are you saying that just because you disagree with their policies, or because there’s actual evidence of incompetence?
And I didn’t call it a dictatorship “as such”, just “essentially a dictatorship”
It’s not so much the lack of meaningful alternative parties that makes it a dictatorial, but the concentration of power to the leaders. So far the leaders have remained benevolent, and I suppose the fact that elections are still held might just be enough to prevent it becoming otherwise.
No doubt, if Singapore had trains, the trains would run on time. But I doubt if I would like to live there.
In fact, (I forget where I heard it) a lot of Singaporeans would like to live here! I suspect it’s more to do with the vast distances than the political freedoms.
A lack of democracy may (or may not) be bad for economic freedom but the index is not judging how a country got to economic freedom or advocating a particular route. It is merely attempting to determine where various countries are at.
In any case there is lot of evidence that:-
a) economic freedom leads to economic prosperity.
b) economic prosperity leads to democracy.
Terje, accepted. I suppose it depends on to what degree you see economics as being a means to an end. By focusing solely on “economic freedom”, there is the risk of leaving the impression that economic freedom is something worth maximising even at the expense of other freedoms.
The lack of democracy doesn’t change the economic freedom score at all. The economic freedom score is determined by (wait for it) the level of economic freedom. Tax. Regulation. Intervention.
Singapore does have a vote and an occasional opposition MP in parliament. Unfortunately, the election rules make it expensive to run. Also, compared to the fairly competent PAP parliamentarians, the opposition is often low quality. It’s a shame.
But irrespective, the economy in Singapore is relatively free, and they deserve their spot near the top.
Despite what LS implies, economic freedom is linked to economic performance. Of course, it’s not the only cause of prosperity, but it is important.
nichalas — it’s not hard for Singaporeans to come and work in Australia. Some do. Some Australins go and live in Singapore. The two countries are actually very similar in many ways and I think they should be invited into a CER type system (CER = Australians link with NZ). I strongly doubt many Singaporeans would leave because of political freedoms. It’s more about open spaces, the beach and civil liberties.
They might leave come to Australia over chewing gum, though…
John, I quite specifically said that economic freedom *was* linked to economic performance. But the association is very weak at the top end of the scale, even when using strictly financial measures like GDP per capita, but especially so when using broader indexes that take into account, e.g., mortality statistics.
Indeed among wealthy developed nations, there is actually a positive correlation between tax levels and many economic and social health indexes (i.e. more tax = better outcomes).
Of course one can endlessly debate the degree to which correlation demonstrates causation, and the usefulness of said indexes.
Actually Singapore is a good example of how people prefer economic freedom to political freedom. Many wealthy, highly educated Aussies, Americans and Brits choose to migrate to Singapore (and vice versa of course). Business there is good, red tape and taxes are low and the fiscal system encourages entrepreneurship.
A note on Sweden and “outcomes” -
http://www.hawaiireporter.com/story.aspx?12cdc87f-f807-466a-95b1-86913d865505
“Many in Europe stubbornly clutch to the pipe dreams of collectivism, refusing to recognize economic reality. For instance, Sweden is touted as the preeminent socialist state in Europe. However, Sweden’s nationalized healthcare system and generous retirement pensions are only made possible by a corporate tax rate that reaches 60 percent. Sweden’s economy is barely surviving and it’s reflected in the labor market. While Swedish unemployment is just under 6 percent, non-employment (an index that accounts for persons not included in the unemployment rate, such as participants in government programs that pay people to simply look for work) is at an astounding 23 percent.”
I don’t think that is a desirable “outcome”
That’s your judgement Mark. Not that most countries have unemployment rate that doesn’t count a large number of people who might reasonably be qualified as unemployed.
Anyway, Sweden wasn’t the country I had in mind. Finland, Norway and Switzerland are all countries that seem to have made high taxation work well. Which is not to say it would work well or be desirable in Australia, but as long as such examples exist, the possibility of higher taxation per se doesn’t bother me particularly: there are more important things to worry about.
I had a post about Denmark and measurement which got ate by the spam filter. It is pretty convincing so you should come back for it.
High taxation should always worry you. So should low taxation.
(Ideally) Govenrment spending should be justified with a positive cost benefit analysis. The tax rate should be set as broadly as possible at the lowest rate to collect just enough tax to balance the budget (over the business cycle).
Why it should “worry” me? What worries me is that the government we have is getting the best economic (and other) advice it can, and making effective use of that advice.
If the collective wisdom of experienced economists points to significant advantages in lowering taxes, then that’s what I’d like to see the government do. If the collective wisdom of experienced economists points to significant advantages in raising taxes, then that’s what I’d like to see the government do.
As it is, there are experienced economists all across the political spectrum, with widely varying views on taxation, suggesting very strongly that there is no one “best” answer to the level taxes should be at.
Refer to the above. It is made on positive economics, not subjective normative economics.
My opinion is ultimately we shouldn’t have much more than a “nightwatchman” state – because all other services are better provided by Government. There isn’t a complete argument for this, but a normative argument can be constructed from several smaller positive arguments.
So in my biased opionion, I expect that cost benefit analysis would see virtually everything but law and order and defence drop out.
Of course we have to get there from here but there are ways to do this through taxation and privatisation by way of gifting assets back to their theoretical owners.
I appreciate your honesty in allowing that there is not a complete argument for your opinion. As I would do for mine.
At some time you make a subjective judgement.
But I also believe the better your argument is, the more people you should be able to convince with it in the long run. The argument for social democracy has been good enough to convince hundreds of millions of people. If the argument for a “nightwatchman” state is good, it should eventually win out on its merit.
BTW, this is not Argumentum ad populum. I believe the argument for atheism is much better than the argument for theism, and this is the reason that atheism is gradually becoming more and more accepted (still true despite the recent rise of fundamentalism in the U.S.)
There’s some evidence that the argument for smaller government is becoming more and more widely accepted, but it’s not obviously winning the race at this point.
When I was in Singapore last, they had front page news about levels of foreign investment, economic growth etc.
Totally different to Australian headlines about IR laws. Many Australians seem to feel threatened by foreigners taking their jobs, Singaporians seem to embrace trade with the outside world. They seemed to know how much it benefits them.
They are far from a perfect society, however it was interesting to note that their homeless rate and unemployment rate was very low even though they have much less welfare. (Of course, this isn’t surprising to libertarians).
They’re also a smaller nation, with unusually high living density, and located very conveniently as a meeting point for international sea trade, all of which confer significant economic advantages.
I will also say that from a personal/subjective point of view, I find it a very unappealing place to visit or live. By far the most interesting parts are those that are those outside the modern commerical centre.
Singapore has very little natural resources. It’s not all advantages.
I compare Singapore to Malaysia next door.
Oh, and despite the inherent economic advantages Singapore has over Australia, it still has a lower GDP per capita, and the gap has, as far as I can tell, been widening since about 1997, when Singapore rated above Australia.
Malaysia is on a strong growth path, unlike Singapore, which has basically achieved high prosperity. It just started later, from a lower base, for whatever reason.
Taiwan has equally few natural resources, yet set to overtake Singapore in the near future on per capita GDP basis at current growth rates. Despite this, it ranks only 71% free according to the Heritage foundation.
I would argue that it is easier for a poor country to grow given equivalent levels of economic freedom and all else being equal. As such it should not surprise if nations that are a lot poorer achieve more growth with less optimal economic policies (eg China). Nor should it surprise that in the midst of a global commodity boom commodity exporters such as Australia should do well. Especially given that Australia is also ranked highly on the index. Of course the index isn’t gospel and the Heritage foundation isn’t all knowing and factors besides economic freedom are not irrelevant.
“Malaysia is on a strong growth path … It just started later, from a lower base, for whatever reason.”
The reason is a corrupt, inefficient, racist, bloated and incompetent federal bureaucracy. My parents graduated near the top of their states in their final high school year but as ethnic Chinese, were effectively denied access to university places reserved for Malay students. So they spent a couple of years working as highschool teachers, then migrated to Australia. My dad did a correspondence finance course while working for the major banks. Now he’s a senior credit analyst for a global credit agency. They came here with a couple thousand dollars in life savings and now they own several investment properties.
Good work Malaysia.
LS, the long term trends in the US is for greater secularism, not Christian fundamentalism.
http://www.csmonitor.com/2002/1010/p12s01-lire.html
An open border policy with Singapore, Japan, the UK, Canada and the US would work well. I’d also advocate open borders with South Pacific nations, better for them to come to Australia to better themselves financially than for us to prop up their failing states and economies.
Obviously it’s easier for poorer countries to grow, just pointing out that given its history, Malaysia is doing pretty well in the scheme of things. Tim R seemed to be implying that Malaysia’s current relative poverty to Singapore could be mostly put down to differences in economic freedom (apologies if this wasn’t his intent).
Brendon, absolutely agree re the long term trend. But it does have the potential to go the other way for some time yet (e.g. the percentage of people believing in biblical Creationism has been rising over the last decade).
LS,
According to the article I linked to, only 4 major churches (>1 million members) had their membership grow faster than population growth, including the Catholic and the Mormon churches. The Catholic growth can be attributed to immigration from Hispanic nations and the Mormon Church largely recruits from other Christian sects. The current trend is for less fundamentalism now, America is not going to become a Christian theocracy. The failure of more individuals reporting agnosticism and atheism may be linked to peer pressure. Church attendance is a much better indicator, and that trend is in fatal decline.
No, I’m not hugely worried about the US turning into a theocracy either. The fact the McCain looks to be by far the most likely GOP contender should do much to allay any fears of that outcome.
Still, I doubt anyone would dispute that the political influence of fundamentalist Christianity has increased significantly over the last decade or so. I suspect it’s just about reached its apogee though.
LS
Singapore used to be part of Malaysia. So you are evading the issue by saying Malaysia’s lack of economic freedom hasn’t damaged it because it is growing at a fast pace and then conceding that it growing fast because it is from a low base. Well DUH, how did it get to that low base relative to Singapore in the first place if Singapore used to be it minus the resources (and bear in mind too that Singapore is completely dependent on Malaysia for its water supply)? The fact that Malaysia is growing better now is because its economy is freer than in the past.
What winston wrote points to one reason why Malaysia will never reach the prosperity levels of Singapore until it changes some fundamental policies. Its most anti-economic freedom policy is its Affirmative Action for Malays policy which basically drives out a large part of its human capital (i.e. well qualified Chinese) into other countries.
Jason, definitely agree that Malaysia is growing better now than in the past due to increased economic freedoms.
If one tracks freedom by only one measure–say, economic–then a repressive but prosperous government can place high in the measure of economic freedom. If, however, one uses three measures of freedom (Heritage Foundation data added to Freedom House data), then all 185 of the major nations in the world fall exactly into the four levels of prosperity which matches the four levels of their overall freedom.
In short, the nations with the greatest commitment to human rights are the nations whose people are the most prosperous in the world. This positive correlation between freedom and prosperity holds for true for 185 countries regardless of whether they are land-locked or have access to the sea, regardless of whether they are East or West, North or South, regardless of their religion or language, and even regardless of whether they import or export oil.
The complete freedom/prosperity data is on the ‘Stats’ page at Duoism.org
But which way does the causal arrow lie?
I’d suggest it’s self-reinforcing. Higher levels of economic freedom leads to a growth in economic prosperity and education levels, which leads to more opportunities to respect human rights, which feeds back into economic prosperity.
What it doesn’t prove (and nothing ever could of course) is that 100% freedom, were such a thing even possible, would give maximum possible prosperity. Nor does it prove that maximum possible prosperity is a desirable goal.
Singapore seceded from Malaysia in 1965 though I suppose you could set the year of Singapore’s actual policy divergence from malaysia in 1959 when Lee Kuan Yew became leader. Nonetheless in 1965 Singapore was still as dirt poor as Malaysia. Therefore it is valid for TimR to contrast Malaysia and Singapore as comparators for a policy experiment. Though both Malaysia and Singapore have lifted themselves out of poverty, the latter is far reacher with no natural resources (whereas Malaysia has oil), and with the latter dependent on the former for its water supply.
The spam filter must have ate my comments on some other Scandinavian nations.
Real GDP per capita is a very useful measure.
As for Cuba having a higher life expectancy than the US:
People in the US do not live on subsistence wages.
They are relatively free to buy, smoke, drink or whatever they please.
The US has a very high net immigration rate of underclasses who generally become more prosperous from generation to generation.
Cuban hosptials are flithy and the medical treatment available to the elite is basically Western medicine paying western market rates.
Now LS, remember not to mix up incompatible indexes. There was a wellbeing index which ranked Palestine up in the top ten. They had to be making a sick joke.
As for Sweden etc, they have 12% unemployment, a union boss has said they really have 25% “real” unemployment and their system is not sustainable. It has gotten to the point where Scandinavian countries restrict the freedo of movement of young people with punitive leaving taxes. They do have several advantages, such as free labour markets (but high taxes and welfare) and very low or non existent tariffs.
See more here (Denmark only):
http://www.mises.org/story/1274
LS,
I would not say that I don’t have a complete argument for my point of view. There are a series of smaller pieces of evidence based on positive, not normative economics.
Take for example public goods. Mainstream economics is actually based on poor empirical evidence for the justification of some public services. Take lighthouses as a sub example. We need them right? Every economics textbok classifies them as a pure public good? Wrong. Ronald Coase, inventor of the transactions cost theory and property rights solutions to torts and extertnalities, examined the presumptions of the “lighthouse as a public good” model. He found out that it was historically and empirically wrong. Lighthouses were privately provided, and collected fees in ways which the proponents of the public goods argument never considered or knew of.
There are more examples of as to why there is a strong cogent argument based on normative economics, which can be constructed on a series of small positive, empirical economics, as to why the state should be minimsed in its role in society.
That seems fair enough Jason, but what’s the historical trend of “economic freedom” for both countries.
My hypothesis is that there is some “ideal” amount of economic freedom (as measured by the Heritage foundation methodology) that leads to maximum sustainable economic growth and prosperity. Singapore may well have more than is strictly necessary, and Malaysia may have had far less than necessary for much of the 60′s and 70′s, but since then has moved pretty close to the ideal amount to encourage sustainable growth.
Do you think, for example, China would sustainably be able to grow even *faster* with more economic freedom? And how would its trading partners cope with, say, 15% or 20% per annum growth?
Didn’t you chide me on the longer thread when I said I have the empirical evidence to back up the case that free enterprise and minimalist Government works best?
Now you’re talking about an untested hypothesis.
To answer your questions:
1. Yes.
2. Ka-ching. I’d buy a new boat.
Jason
Why do the ethnic Chinese in Malaysia do so much better than the Bumis and the Indians? The Economist ran an article on this a couple of weeks ago – the disparity in pay between the bumis and the chinese in Malaysia is about 4x.
Mark, the difference is I’m completely open about the fact that it’s an untested hypothesis.
Yes, your argument is. Mine isn’t. Let us be clear about that.
Pommy
it’s hard to say. I would almost say it’s because the Chinese have more experience dealing with a sophisticated economy than the Malays except the Malays were traders as well – nonetheless I still think there is some truth to that. Malay society was primarily village based and agricultural whereas the overseas Chinese have been everywhere setting up and running businesses even under colonial rule. Secondly there is probably still a cultural element i.e. the Chinese have something equivalent to a Protestant work ethic whereas Malay society is more laid back and hence hasn’t adapted as well to a cut-throat modern economy.
Incidentally I don’t think the Indians do too badly. A lot of them end up in the professions. To some extent insofar as they do badly it’s because they get the worst of both worlds – like the Chinese they are also subject to the institutional discrimination of the Bumiputera policy but they don’t have as such large family/business networks as the Chinese.
BTW being Peranakan on both sides of my family, I could probably find a Bumi in my family line if I dug down far enough (like Lee Kuan Yew incidentally whose mother was half or a quarter Malay) though I’m not sure whether enough to qualify for one of these AA privileges
Mark – “free enterprise and minimal goverment works best” isn’t even a testable hypothesis, unless you tell us how we are supposed to measure “best”.
If you want to talk about happiness research, speak to John Humprhreys. Or go here:
http://happinesspolicy.com/
Basically there is no reason to conclude that good economic outcomes lead to less happiness. Mostly they are not realted but good economic outcomes enable better happiness or well being. We are actually working less than in the past – ask John again or perhaps lob over to Andrew Norton’s blog.
As for other accounting systems (triple bottom line) and externalities, a system of strong private property rights minimises externalities.
As to the rationalist economic argument, merit goods have a paticularly weak justification and some pure public goods have been wrongly categorised as puiblic goods.
The macroeconomic arguments against socialism, protectionism and Keynesianism are very robust.
It would be the specific microeconomic arguments relating to public goods and merit goods which fill in the gaps and suggests that a Government which ran on a totally utilitarian basis would converge towards minimalist Government.
Where did I mention happiness?
Your last sentence sounds reasonable enough to me.
But my idea of “minimalist” is somewhat broader than yours.
To me, it’s not “big” government to have single-payer healthcare or education. By far my biggest concern is micromanagement – the government trying to step in at every little opportunity to tweak things here and ban things there (I’m especially opposed to bans, which backfire far too often). Once we’ve got that to a minimum then I think we can look at the benefits of allowing private enterprise to prove it can do better than the government at providing public services.
I strongly suggest you consider the possible use of voucher and cash trasnfer shcemes than nationalisation of entire productive systems, which will invariably lead to micromanagement.
If a case can be made that amerlioration through taxation is not longer required, then we can do away with it.
There are several ways to enable this, one being returning assets to the ownership of their theoretical owners, in the form of gifting corporatised shares and cash proceeds from selling fixed assets. The change in wealth would be permament and therefore have positive long term impacts on consumption patterns.
The evidence as I understand it points to the advantage of single-payer, not so much single-provider. I tend to agree that it would be better to have independent providers of healthcare and education, preferably not-for-profit ones.
A lot of American higher education is private, and non for profit. Duke University for example. These places are well known and have an excellent reputation.
Which is great – now all they need to address is the affordability. Higher eduation should never be denied to high-school graduates just because their parents didn’t earn enough money.
Somewhere like Harvard charges prices based on its prestiege – university products are not homogenous, even if superficially.
Again, affordability is not a reason to nationalise production, nor is it the best policy repsonse. I don;t think quiality education need by exorbitant either.
You can earn a Diploma in Law from Sydney University, full fee paying for around $16000, all up excluding textbooks. It isn’t a degree but it is as good as a degree (LLB) in terms of competency and it gets you entry into the Grad Dip in law you need to be admitted to the bar or as a solicitor. You can pay for this out of your salary or it might be a packaged and paid expectation or term of your employment for in your first year out as a graduate lawyer or clerk.
What we need is to free up the restrictions on education laid down by delegated legislation and Government backed cartels.
In Australia, who can teach what courses in each state at the vocational and tertiary level is determined by the relevant Minister in each state and is changed by executive order. I was told this by TAFE when I once enquired about courses.
The two step solution is to free up the education market, and to provide a voucher system if some kind of amelioration is required.
We should also think about the impact of certain provisions of the Trade Practices Act which forbid employment contracts which guarantee training and qualification to some extent. Such a deregulation reform would be part of the overall package of creating a free market in education.
We should also think of the crowding out effect of HECS and consumer credit code restrictions which make private student loans impossible.
Well if you were worried about the crowding out effect of HECS, I guess you could means test it based on parental income, but I’m not sure there’s all that much benefit.
Can’t understand any reason why employment contracts shouldn’t be allowed to guarantee training and qualification – what was the justification behind this?
1. Means testing is bad. Flat taxes with a threshold and lump sum cash transfers will be superior every time.
2. Ask Gough.
Ok, but the threshold has to be based on *parental* income. At the point that high-school students are deciding to take up higher ed., they typically have no income at all.
The threshold refers to a tax free threshold. Getting rid of means tests means getting rid of transfer specific thresholds.
Sorry I worded it so poorly.
But tax free thresholds apply to an income. Students out of high-school don’t generally have incomes.
Yes, and a voucher system of any (university, high school) kind shouldn’t be means tested, only taxed, analogous to a NIT like the LDP’s 30/30 plan or the consumption based tax I prefer.
I hope this is clearer now.
I’m open to a voucher system. Have there been any significant trials of such a proposal?
All throughout America, re, Charter Schools.
Do you see it as an issue that vouchers subsidise those that can already afford the full cost of private education?
(I don’t particularly, but I’m just curious)
The biggest concern I have is cream skimming, but I don’t think it’s insoluble. The other is giving more government money to religious institutions. But this would hopefully be offset by getting rid of all the tax breaks and perks they get currently.
No, because you tax it with a flat tax.
Churn is bad, mmkay?
Tax what with a flat tax?
BTW, I just read about the voucher system in Sweden, seems to work well there.
All income or consumption.
And BTW to the extent that churn is just numbers on a wire, as it typically is these days (and will most likely increasingly become so), why is it so bad?
Ninety billion dollars per annum of waste, that’s bloody why.
A flat tax and lump sum subsidy minimises churn, administrative costs and eliminates poverty traps.
Where is the 90 billion dollars going exactly?
If all taxation and subsidies were automated via electronic transfers, why should there be any significant cost to it?
I can out forward a point of view, but some economists are btter at explaining different concepts.
A good starting point:
http://www.google.com.au/search?hl=en&q=sinclair+davidson+churn&meta=
But this article describes why we need tax reform and to cut churn:
“Henry Thornton – Tax reform – the economic case”
Google it too.
I agree we need tax reform and to cut churn.
I just think it the most important measure is massive simplification of current system, and continuing to move towards automated/electronic-transfer systems.
Mark – it’s an interesting paper. Do you really think unemployment is actually 15% rather than the official 5%?
Typically the “real” unemployment rate is double the official figure.
Freebairn is an expert on labour economics and I can’t see any problem with his methodology.
So I accept it is 15%.
Unemployment figures are a very crude proxy.
What’s better – 95% of the population all working only a few hours a week in low-paid jobs, but all desperately wanting to be working full-time in well-paid jobs, or 90% of the population happily working full-time well-paid jobs, with 10% of the population not being paid to work at all?
You are presetning a false analogy.
Why do we have a choice? Hidden unemployment is caused by disincentives to work and discouraged workers. I think the choice you present is non existent.
You also imply the lump of fallacy is true. It ain’t. It’s a fallacy.
http://en.wikipedia.org/wiki/Lump_of_labour_fallacy
Why a false analogy? It’s a hypothetical (and extreme) dichotomy, to be sure.
Bit confused why my question implies I think there’s a fixed amount of employment available – indeed it makes no sense if I thought that.
I just don’t understand why we should be automatically concerned when, say unemployment jumps from 3.9% to 4.0%.
A single stat like that hides lots of underlying detail about how employment is actually structured.
No, it just isn’t an example that will ever happen.
Why would we be faced with a choice of 90% full time employment and 44.5% employment if more people had jobs?
You’re right and you’re wrong. I suggest you see the wikipedia article on types on unemployment as to why you are right. To say why you are wrong, in a workforce of 10 000 000, .1% is 10 000 people out of work. That’s a whole lot of non-financial costs society can incur. Of course the real fear is that it might keep on going.
Agreed, unemployment figure trends are more important that specific numbers. One reason I think that Germany’s economy is in a better shape than America’s, despite the former having a higher official unemployment rate. Worse still, various countries define unemployment differently.