Tony's Tip 49 - Estonia walked on the water!

Tony’s Tip 49 – Estonia walked on the water!

Did you know that the former prime minister of Estonia, Mart Laar only read one book on economics -- Milton Friedman's Free to Choose.

He admits he was a bit ignorant at the time and 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 were already in practice in the West.

The result was that in barely two years, from 1992 to 1994, Mart Laar’s government became the first in Europe to introduce a flat tax, he also privatized most of the nationalised industry, abolished tariffs and subsidies, stabilized the economy, balanced the budget, and perhaps most crucially, restored the pre-war kroon and pegged it to the stable deutsche mark.

In “Free to Choose: A Personal Statement” Milton Friedman maintains that the free market works best for all members of society, he then provides examples of how the free market engenders prosperity, and maintains that it can solve problems where other approaches have failed.

This seemed common sense to Mart Laar while he also thought everyone else was doing it, therefore he simply introduced it into Estonia, even though he received dire warnings from Estonian economists that it could not be done. They told him that it was as impossible as walking on water.

He did it: Estonia walked on the water because they did not know that it was impossible!

Today, Estonia ranks 9th in the world in economic freedom, with Switzerland and Ireland being the only European nations ranked more highly!

So the impossible is possible, it was in Estonia and it could be for you.

If you think this is a one off, look at how a Yale University management professor who marked Fred Smith's paper proposing a reliable overnight delivery service, he wrote: "The concept is interesting and well formed, but in order to earn better than a 'C,' the idea must be feasible" Fred Smith founded Federal Express Corp!

You can even go back to 1859 when Edwin L. Drake tried to persuade people to drill for oil, they told him: " You're crazy, drill for oil? You mean drill into the ground to try and find oil! " If he listened where would we be now?

I could go on and on but my point is the impossible is possible, you just have to believe it.

© Tony Dalton