Last night, a nine year old commented that it must be hard having to vote, checking off all those boxes on a ballot. The remark followed his inquiry into why we were watching TV and why President Obama and Governor McDonnell of Virginia were giving speeches.
We can take it for granted that each year, the President will step forth in front of Congress, the Supreme Court, the Joint Chiefs of Staff, the American Public, and increasingly, the global community, to fulfill his or her constitutional responsibility to comment on the state of the Union. While many of these speeches are predictable, perfunctory, partisan, and light on content, they play a symbolic role in reminding us that we elect these people, separate their powers, and make it very difficult for any one party, politician, or military officer to consolidate too much power. Frustrating at times for some, but not a bad deal relative to what many of our fellow global citizens experience.
As we start this decade, we can be certain that it will be a decade in which our forward looking assessments of investment markets and opportunities will dovetail with the expansion or contraction of political and economic freedoms around the globe. In its January 16th issue, The Economist speaks to a concerning trend regarding broadly defined liberal democracies—those countries defined by electoral democracy, political and press freedoms, and human rights. The organization Freedom House (www.FreedomHouse.org) evaluates the world every year and issues a report that ranks each country as “Free,” “Partly Free,” or “Not Free.” (see map attached below) While the categorization may seem simple, Freedom House provides considerable data and commentary with the report as well. It is a humbling read.
For example, in 2009, only 46% of humanity (3.1 billion people) lived in “Free” countries. That does not mean that all of these people were politically enfranchised, economically self sufficient, or educated well enough to participate in their freedom; however, at least the broader context in which they lived provided for certain political and human rights. Unfortunately, that means that the other 54% of our fellow human beings (3.7 billion people) lived in “Partly Free” (20%) or “Not Free” (34%) countries. Over the last four years, more countries have regressed than progressed (e.g. Russia, Thailand, Honduras, etc.) and so many would say momentum is not on liberty’s side.
Readers of our Weekly Update know that we see globalization as a potent trend that can bring economic growth and opportunity to the poor and extremely poor around the world. We also believe, however, that without significant increases in political freedom (e.g. rule of law, free press, women’s rights etc.) in many autocratic or semi-autocratic countries, that economic growth in those regions will stall. Historical evidence lacks significant examples of totalitarian regimes presiding over robust economies. Totalitarianism is not a sustainable economic model, except for those at the top and only for as long as they can stay perched there.
Americans and Western Europeans in particular have developed an expectation that our greatest political debates will be played out in the public sphere, that our media (formal and informal) will provide an opportunity to express dissatisfaction and downright anger about politicians and policies, and that we will constantly self-examine our society to identify our failures. Such a cacophony of rhetoric and critique can make it seem as if Freedom, if you will, is broken. It certainly provides fodder for authoritarian regimes to hold up their false stability as superior.
As we enter what promises to be an intense year of political debate, policy changes, and economic restructuring across the board, we recognize that for all the other challenges we face, we face them in a country where we can do so freely, where nine year olds take for granted that the President has a few words for him each year—and so does the opposition.