What makes an economy grow?

On 15 Februrary 2016, Samriddhi Foundation hosted a talk program on ‘The Secret to Prosperity: What made England rich?’ at Himalayan White House International College, New Banesor. The session featured speaker-Dr. Eamonn Butler, Director- Adam Smith Institute and was moderated by Akash Shrestha, Research Coordinator- Samriddhi Foundation.

Dr. Eamonn Butler is Founder and Director of the Adam Smith Institute (ASI). ASI has been influential in several public sector & tax reforms in the UK and was ranked 7th in global think tank rankings in 2013.

Before 17th century, markets were heavily regulated in England. There were government owned monopolies, bans on innovation, subsidies to exporter and tariffs against import.. Also, property rights were merely an unknown concept. The Enclosure Act of 1604 allowed people to put fence in their house, meaning that their right to ‘private property’ was respected. In addition, this also meant that they could now use the land as per their wish. If they wished to herd cattle on it; do agriculture, rent it, or do whatever they wanted with it (keeping in mind the rights of other people as well). This fundamentally led to innovation. People started developing agricultural techniques because there was no risk of being infringed by the government.

The lessons from the lecture are as follows:

  1. The brief summary of events that took place from 1750 to 1820 AD which made Britain reach opulence.
  2. The government should not run an economy prosperous but create conditions to make it prosperous.
  3. The factors that made England prosperous were- permissive legal system, property rights, rule of law free trade, low taxes, deregulation, private finance and limited government.

To download the presentation on ‘What made England rich?, click below!

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